Using Partnerships to Grow Your Business
Using Partnerships to Grow Your Business
Forming a strategic partnership can create new opportunities for many small businesses. But it's important to choose wisely to make sure it's a match that will lead to profits.
Strategic partnerships come in all shapes and sizes. Various factors such as industry, size, values, and mission all come into play in finding the ideal strategic alliance. In other words, a partnership that suits one business might not work well for another.
The type of partnership that's best for your business will depend on your purpose in entering the arrangement. For example, the following are common types of strategic partnerships and their related goals:
- Community or neighborhood partnerships. In this type of partnership, businesses team with nonprofit, community, or neighborhood organizations to provide benefits for the local community.
- Brand partnerships. In this form of partnership, also known as co-branding, businesses with noncompeting brands develop joint marketing or advertising initiatives to promote both partners' brands.
- Corporate partnerships. Small-business startups sometimes turn to a corporate partner to help ease the startup burden, with the more established corporation providing a significant financial contribution while the startup supplies the product or service being marketed.
- Content partnerships. Much like a brand partnership, content partnerships allow businesses to collaborate on specific content-related campaigns to increase exposure for each of the partners' businesses.
- Referral partnerships. Partners in a referral partnership typically offer complementary products or services. When one partner's customer requires goods or services it doesn't offer, that customer is then referred to the partner that does offer the required items.
Enterprising entrepreneurs may find themselves establishing a number of different types of partnerships, and ultimately the important thing is not the name you give each partnership, but rather how each partnership, collaboration, or alliance benefits your business.
For example, Tim Hordo, founder of Moovler, a Vancouver startup that connects pickup-truck owners with small moving jobs, has utilized a content partnership involving manual outreach. One content-related campaign reached out to several hundred local realtors for contributions to a round-up article. "This has helped get our name out there," says Hordo, "and introduced us to stakeholders we see as 'gateways' to our customers, as well as people who can use our services for their own benefit."
Hordo has also established strategic "within-industry" partnerships, often with businesses that, at first glance, might appear to be competitors. These partnerships often involve customer referrals, with Moovla referring large-scale moves to full-service moving companies, and those companies, in return, referring smaller moving jobs back to Moovla.
Creo Home Solutions, a Baltimore business that purchases houses to flip or rent, also engages in referral partnerships. The company's CEO, Melanie Hartmann, notes that "When someone contacts us, and we are not the best fit for what they need, we refer them to other local professionals who can help them reach their goals, either with renting, buying or selling a property — and almost anything in between."
Benefits of Strategic Partnerships
Whether it's increased synergies, ability to tap into a wider, complementary reach, or something as basic as streamlining manufacturing efficiency, the right strategic partnership offers multiple advantages to the small-business owner.
For Creo Home Solutions, a major benefit has come in the form of high-quality business relationships developed through trust and connection. Hartmann cautions, however, that care must be taken to choose the right partners for your business so that you don't run the risk of referring a client to a "bad" partner whose subsequent flaws reflect badly on you.
Moovla's Hordo has also seen many benefits from the strategic partnerships his company has formed. "The mutually beneficial nature of the partnership means we are effectively serving as marketing channels for one another," he says. "It also allows us to serve as sounding boards for various ideas, as we are in the same industry, although not technically competitors."
Leveraging the Power of the Strategic Partnership
Hordo advises small-business owners looking to benefit from strategic partnerships to spend time brainstorming potential partnership opportunities, recognize any valuable opportunities that might arise, and, once you've entered into a partnership, be prepared to spend time fostering and maintaining these relationships. He suggests performing small acts of appreciation, such as sending thank you notes, which will go a long way toward fostering a good long-term relationship.
It's also important to know who you are planning to work with. For example, what is your potential partner's mission? Are their ethical and moral philosophies and practices in line with those of your business?
Hartmann offers this piece of advice: "Evaluating partnerships is an ongoing process as owners and philosophies change over time. So check in regularly — at least yearly — to ensure that you want to continue with the relationship." She also advises business owners to evaluate whether the partnership remains mutually beneficial. If things have changed, consider renegotiating the terms of your arrangement as needed, or ending the partnership if it is no longer mutually beneficial.
Many small-business owners are used to "going it alone." This doesn't have to be a natural state of affairs, though. The strategic partnership offers small businesses the opportunity to form collaborative relationships with other businesses that can offer a multitude of benefits to all parties involved.