You are a small business, so that means going it alone doesn’t it? No, it most certainly does not. As building links with your clients you can build links with other businesses as strategic partnerships.
What are strategic partnerships?
It is a posh way of saying complementary businesses with whom you build links. As you are not competitors, but each have an offering that is relevant to the clients, then working with each other can help grow each of the businesses quicker and more profitably.
In this article we are not talking about Joint Ventures that have a legal standing – leave those to the larger boys for now – instead we are talking about working with other businesses. But what are the advantages for you? After all some time has to be spent on building those relationships which in itself has a cost due to the lost opportunity cost of being able to spend that time on client facing activities and work. So, any partnerships have to be able to deliver more to your bottom line than working on your own.
How can strategic partnerships help in your business?
Joint marketing: If two or more companies are involved in a marketing campaign then the costs are shared. In addition, each of the companies involved has their own clientele to introduce the other companies to, so you benefit from cross-pollination. After all, if your partners clients trust them and the partner trusts you, the clients are more likely to trust you too. It is like having a whole load of warm leads.
Lead referrals: It may be that you have skills that the strategic partner needs in order to deliver a project, so as you are already working together of course you get that work too. It could also be that they are asked for products or services that they do not provide, but you do, another hot lead for you.
Credibility: By working with others then your businesses credibility and gravitas grows too. Their good reputation amplifies your good reputation. It also allows you to give a more expansive offering to your clients, whilst you remain the expert in your section of that offering.
Wider geographical footprint: It could be that your partner already has a base in another geography, which could enable you to grow in that area too. That geography could be a town, county or even country.
Speed to market: By working together and sharing costs then you can do more and get to your target market quicker.
What should I look out for to have a good strategic partnership?
Cultural synergy needed: If your two companies operate in two entirely different ways then they could be clashes which could cause the partnership to either not take off or collapse. So just as you check out if the personality of new employees fits with you and your team, in the same way does the company personality fit with yours. This is something to look out for when you do your due diligence.
Overdependence: Any partnership has to be two-way. Leads and referrals are passed both ways. Both benefit, but both are there own entities. If one business is only existing because of the relationship with a partner then there are queries as to whether that business should just be bought out by the partner, or whether they should do some client acquisition so that they can stand on their own two feet.
What types of businesses can work together?
Here are some examples: A bridal shop, with a make-up artist and a hairdresser. A social media management company with a web agency. A software company with a hardware company that their software needs to be able to run – for example, a games company with a games console manufacturer.
There are potential partnerships no matter how big or small your business is. Which businesses do you know that you could work with to mutual benefit? Why not make an approach to work together?
[originally posted 4/2/21; edited 15/3/24]