“Two heads are better than one” is an adage that applies very nicely to business – even more so if the heads are other companies with whom you can build mutually beneficial relationships.
Strategic business partnerships give small businesses and startups the opportunity to grow their company and offer better support and services. Partnering with other companies that provide different services or products within the same or similar markets will help you reach new targets and expand your customer reach, build your reputation, give you access to new products and increase customer loyalty.
Some use partnerships to strengthen weak aspects of their business, while others share customers. At Crunch, we’ve partnered with great companies to offer complementary services alongside our amazing accountancy products, such as Crunch Mortgages, Small Business Insurance, and Collections. All of these businesses offer something of value for our clients – quite often this also involves discounts and bonuses.
Thinking about partnering up? Here are some tips to help you:
Why form a business partnership? How will both businesses benefit and, equally as important, what benefit will you in turn offer to your customers?
This is the first stage in the process. Once you’ve established what you want to achieve – e.g. a more well-rounded service, gain more customers, branch out into new markets – you will have a better idea of the type of business you wish to partner up with.
Decide on potential partners
Once you know the area of business you want to target e.g. photographers, web designers, IT contractors, you have a far bigger task of finding the company that’ll be the right fit for you. Here are some factors to consider:
Appropriate products – It may be obvious which services are likely to work well with yours, but for companies selling products, it’s not always as simple. Think about what products complement yours. If you’re selling garden furniture, you may want to partner up with a landscape gardener. It is also important to ensure you don’t partner with businesses who might steal your customers.
Mutual benefits – Both parties must benefit from the partnership, and so should your customers – by sharing customers and providing them with high quality, complete service, you’ll considerably improve the experience your customer has. It’s important to have good communication and ensure the relationship is balanced, so choose a business that’s mature and stable enough to keep their end of the deal. It’s always advisable to do thorough research into a company before you approach them. Understand how their business has developed, their future plans, profit margins, and current customer base.
Pitch your idea to the prospect
Present your idea as a win-win situation. To do this you’ll need to clearly demonstrate exactly what your businesses can do for one another and how you intend to ensure this going forward.
After the initial discussion, always make sure you’ve outlined your plans in writing so that there can be no confusion later down the line. And stick to your commitments, this relationship will only work if you’re both completely transparent and reliable.
Determine objectives and metrics
This will help you keep track of your commitments. It’s better to determine objectives in the beginning to avoid any unrealistic expectations and to have concrete goals to work towards.
If each of you defines success from the outset, it’s far more likely you will achieve it. This will also help determine whether you really are the right fit for one another’s businesses. Agree on the targeted revenue and benefits each party will receive and appoint a time to review these several months or a year down the line.
Don’t let the relationship go cold
Just as with any good relationship, strategic partnerships require a bit of work. Ensure you check in regularly, have structured reviews of progress and work together to ensure you’re constantly improving. Don’t just agree something in principle and let it go stale. Also, talk to your customers about how useful they find the partnership – are they getting the most out of it? Is there anything else you can be doing to improve their experience?
What the experts say
“Over the years, I have worked in collaboration with a few trusted freelance colleagues. This has been especially valuable for large-scale and complex projects, where it has been an advantage to share the load and get the benefit of another perspective. It is also less lonely. Having such a network has also meant that I have been able, on occasion, to call on help at short notice, in an emergency and when I have been unable to fulfil a commitment.”
– Lesley Galpin, owner of Dr Lesley Galpin Associates
“It can often prove worthwhile to work with other businesses offer complementary services to your own, which are aimed at the same or similar customer groups. By doing this you can open doors to opportunities that wouldn’t otherwise present themselves.
“You really need to find out as much as possible about any business partners. If you’re not fully aware of the way the other business works and what their objectives are for the partnership, disputes can arise.”
– Matthew Jaffa, senior development manager for London, of the Federation of Small Businesses.
“I’ve built my business by collaborating with others and when I’m not able to pay them, rather than expect them to do it for nothing (no one should be asked to do this), I swap services; building a strong business partnership moving forward. Building partnerships builds trust and widens your professional circle. So many recommendations and referrals have come from my partnerships.”
– Bethanie Lunn, editor of The Modern Guides.