When you’re growing a small business, partnering with another can give you a big boost. Choose the right partner and you can both grow exponentially!
Partnering with another business can help you:
1. Access an entirely new pool of customers.
2. Generate more word of mouth.
3. Share marketing and advertising costs.
4. Control facilities and operations costs by sharing space, shipping costs, and other expenses.
Here are the most effective solutions for partnering with another small business:
Choose a partner with similar interestsAn architect teams up with an interior designer and together they generate more and better leads for new projects. Other typical complementary relationships include real estate agents and banks or mortgage brokers; business brokers and valuation companies; apparel and footwear companies who cater to the same customers.
Know what you want to get from the partnershipYou can create a joint venture or alliance for any number of reasons: to cross-promote your products; to develop new technology together; to share costs; or for a distribution partner to resell a manufacturer’s products. While some good partnerships occur from an “aha” moment that occurs on the fly, it’s worthwhile to set goals before kicking off an alliance.
Get it in writingWhile very small businesses often handle partnerships informally, if you’re partnering with a business that’s bigger than yours, sign a partnership, joint venture or strategic alliance agreement that clearly spells out expectations.
Watch out for common obstaclesWhile partnerships offer tremendous rewards, they can be risky. Becoming aware of potential obstacles can help you avoid them.
Stanford University webcast about partnering with a potential competitor. If you’re already experiencing troubles in an existing partnership, take this quiz from U.K. solutions provider Socia, which will give you feedback about how to solve partnering problems.
- Start with a single project and measure the results before engaging in a more comprehensive partnership.
- Determine where your biggest opportunities are for growing revenue or shrinking costs, and figure out a joint venture that attacks that challenge. For instance, two companies that both import from a similar geographic area might partner to fill a container and thus control shipping costs.
- Sharing space with another company? Consider sharing marketing materials and also promoting your office partner’s company to your customers.