While it may be common knowledge that there is strength in numbers, small business owners tend to forge their paths alone, and paradoxically, the smaller the company, the more inward focused its owners can be.
If you are running a small business- whether it’s online, at home, or from a brick and mortar physical location- realize that you may be overlooking a very valuable resource pool that can reduce costs, increase sales, and improve brand awareness: other small businesses.
3 Ways Your Small Business Can Benefit from Business Partnerships
When small business owners decide to join forces, the majority of these partnerships tend to focus on one or more of the following three benefits:
1. Reducing overhead costs. From office supplies and printing runs, to small group health insurance plans, many overhead expenses can be reduced when purchases are made in bulk. Connecting with other businesses to share expenses can happen in other areas as well, such as shared property rental costs via some kind of subletting arrangement or shared office space, and travel expenses to common destinations, such as an industry conference or trade show.
2. Joint marketing efforts. Connecting to other businesses in order to cross-promote each others products and services or to jointly promote an event can greatly expand your marketing reach. For example, you could team up with another business to help make your Internet-based marketing efforts more effective by agreeing to promote each others tweets, writing, publishing, and promoting guest posts, and cross-promoting other website content. You could also partner with another business to sponsor an online or off-line event, such as a seminar.
3. Expanding business. Some partnerships emerge when small businesses are looking to offer their customers a more comprehensive service like, for example, a print shop partnering with a company of graphic designers. Small business joint ventures also allow smaller companies to be able to take on bigger jobs, such as landing a government contract or be in a position to supply a product or service to a large corporate client. Still others may partner up in order to expand their skill set or expertise, like say, a financial adviser partnering with an accountant.
5 Tips for Partnering Up with Other Businesses
How much you will benefit from partnering up with other businesses will to a large extent be dependent on how much thought and research you put in to the effort. You could save yourself a lot of grief if you consider the tips below and work to prevent future mis-communication and misunderstanding between your business and any other business you team up with:
1. Determine what you are looking for in the partnership. Before you start scouting out potential businesses to partner up with, you have to be very clear about what you hope to gain from the setup as well as what resources, skills, and experience your own business brings to the table. Ideally, you are looking for businesses that can compliment any weaknesses or limitations that your business may have, while offering
2. Make sure the business you are partnering with compliments your own. The key to a successful small business partnership is establishing strong relationships with other small businesses that can provide skills, expertise, and other resources that complement yours, and that these brands can naturally be associated with your business. Some typical examples include:
- A wedding planner who partners with caterers, photographers, florists, and DJ’s
- A website designer who partners with a graphic artist
- An online marketer partnering with a content creation company
3. Set clear expectations. You want to make sure that you and any business you partner with are on the same page from the beginning when it comes to what each will put into the partnership and what each should receive from it. Depending on the nature of the partnership, you may also have to agree on logistical things, such as how work orders will move from one business to the next, as well as settling on a game plan for potential problems or disputes, like when a customer doesn’t pay up. Where a partnership is intricate, then all the details and expectations should be clearly written down, read over, and signed by all parties involved. In some cases, you may have to consult with a legal professional.
4. Track progress. To make sure everyone stays on the same page, write down all of your joint activities as well as their results. This can include writing meeting notes, collecting expense and sales figures, and storing copies of marketing materials. Having access to this information can help determine the effectiveness of the partnership and clear up any confusions along the way.
5. Evaluate the partnership. Make sure that you regularly monitor the progress and results of your partnerships. The whole point of joining forces with another business is to maximize some gain. If you see that you are not reaching your goals or that the partnership is taking away vital resources from other areas of the business, then it could be a red flag that something needs to be changed. You should also keep track of how you and your employees feel about the arrangement and try to get the other business to do this as well.
In short, no small business has to be an island. Leveraging the resources of other businesses and giving from your business to others can be a powerful and effective technique to help reduce costs, expand your market, and keep your customers happy.