A strategic partnership is a powerful tool to achieve sustainable growth and success. By partnering with a like-minded business, you each benefit from shared resources, expertise and networks. All of which can open you to new and exciting opportunities.
What is a small business partnership?
A small business partnership is when two small businesses come together to achieve goals that benefit both sides. Unlike a merger, they work together and keep their independence.
Each company brings its unique strengths, resources and expertise. It can result in new ideas and perspectives and develop new products, services, or even processes. Working together creates a powerful synergy that helps each side grow, save money and reduce risks.
Whilst trust, respect and open communication are key, it’s just as important that both sides have a clear vision and an agreement outlining who is responsible for what. The shared risk and reward mean both sides will put equal effort into its success. This can result in access to new markets and increased brand visibility. It’s a win-win all around.
How does a small business partnership work?
A partnership can take a number of forms depending on the end goal. It could be a joint venture, a co-marketing agreement, or even a technology-sharing alliance. It could be creating a new company together for a specific project or market, or even working together to create a new product or service. So where does it even start?
It’s about understanding each other’s strengths and weaknesses. Combining strengths allows you to come up with new ideas and solve problems together. Two key traits of a successful partnership are good communication and decision-making. Being able to meet regularly and give updates will help a partnership stay on track and bring the results you hope for.
There’s also a shared risk and reward. It’s great for a small business as it allows you to try new things, explore new opportunities and succeed together.
In this article we’ll share four collaborative approaches you can use to scale your small business through strategic partnerships.
Find the right partner.
First, look for a business that shares similar values and goals to you, with strengths that complement yours. Do the research to see what their reputation is like and if they are reliable. It’s really important that this is someone you can have an open conversation with.
You want a partner willing to invest in the long-term potential of your partnership. Why? Because together you can access new markets and resources, leading to sustainable growth and innovation. There’s no need to rush, take your time to find the perfect fit and collaborate strategically.
It might even be a reason you get hired according to a survey report which found 71% of consumers enjoy co-branding partnerships.
What should you look for in a successful partnership? Here’s a brief checklist:
- Open dialogue, shared values: Seek a partner with aligned values, open communication and strengths that complement yours.
- Investment in long-term growth: Look for a partner who wants to invest in the long-term potential for expanded markets and sustained innovation.
- Clear roles, fluid adaptability: Define roles and responsibilities while remaining adaptable to changing business landscapes.
- Trustworthiness and reliability: Partner with integrity, building trust for a strong foundation.
- Vision alignment: Ensure your partner shares your business’s long-term vision.
- Diverse expertise: Choose a partner with skills that enhance and balance your own.
- Risk-share, reward-share: Agree on how to distribute gains and handle setbacks fairly.
- Conflict solutions mapped: Develop conflict resolution strategies for smoother collaboration.
- Scheduled progress checks: Regularly evaluate goals and partnership effectiveness.
- Legal and financial prudence: Seek professional advice for legally sound agreements.
- Cultural harmony: Consider compatibility in teamwork and decision-making approaches.
- Network amplification: Partner with connections that offer valuable resources.
- Future-focused planning: Plan for growth stages and eventual transitions.
Leverage complementary resources.
Teaming up with the right partner means access to assets, technology and skills you wouldn’t have if you did it alone. Combining resources means you’ll work better and be more efficient and effective.
A great example of this is a technology company having a strategic partnership with a marketing-savvy business. Why? Because it has the skills to reach and engage more customers.
Sharing resources will save money for both parties, meaning you can focus on what you do best. You’ll achieve more together. And it’ll open up new opportunities, make you more competitive in your market and help boost your innovation.
In fact, research from the BPI network indicates that 44% of businesses “seek alliances for new ideas, insights and innovation”.
Access new markets.
Another benefit for a small business in a strategic partnership is reaching new markets. If you partner with someone already in your desired market, it’ll make it easier for you to enter. Their knowledge of that market and its customers will give you valuable insight and help you avoid costly mistakes. This will help you adapt your product or service to suit the desired market and increase your chances of success.
Being associated with a partner is also a great way to build a great reputation and gain trust in a new market. It’ll instantly make you more visible and credible.
It’s tough for small businesses out there and trying to expand into new markets alone can be limited. A strategic partnership will help you explore untapped opportunities and find a new path to growth and success.
Trust is everything. If you and your new partner can support each other through tough times, you’ll grow stronger together. Teamwork will make you more resilient and able to handle life’s unexpected challenges – so pool together your resources and expertise. When one of you faces a problem, the other can help, reducing the impact on both businesses.
Set yourselves up for success, even during difficult times by diversifying in different areas and shielding yourself against competitors. Instead of focusing on just one market or product, explore different areas. This will help you handle changes in the market, as well as the economy. And in terms of competitors, by aligning together, you have more strength making it difficult for others to match.
Explore a strategic partnership to grow your business.
As a small business owner, it could be time to explore a strategic partnership. Collaborating with the right partner can be transformative for your business.
To get started, follow these steps:
- Identify potential partners in your industry.
- Reach out and express your interest.
- Explore opportunities to collaborate.
- Establish clear communication and shared goals.
- Formalise the partnership.
- Nurture a win-win mindset.
Set your business on a path of growth and success. It can open doors to new markets, enhance your offering and create a competitive advantage.