“Operating a small business is not always a walk in the park. To maintain and grow a small business comes with its own set of challenges and one of the biggest hurdles can be your lack of resources and expertise.”
As a business owner, trying to do everything by yourself can leave you exhausted, overwhelmed, and frustrated. If you are a new business owner its no surprise you are trying to do everything yourself but you need to consider that being good at everything is nowhere near as beneficial to your customers as being great at just a few things. Small businesses need strategic partners to grow and survive.
A strategic partnership simply means, entering into an agreement with another business with the aim of combining your efforts in order to create a mutually beneficial business relationship. Forming strategic partnerships with other like-minded partners is a great way to help both companies support each other and get ahead as well as expound upon your skill set or product and service offerings.
A strategic partnership isn’t just outsourcing services to contractors but involves forming useful partnerships for the benefit of both parties. If you compare this to traditional outsourcing, strategic partners have a vested interest in performing and delivering to the best of their ability as it most likely will result in generating more revenue for their business with minimal effort. (That means do a great job. Deliver what you promised and then some, and your strategic partners will come back to you time and time again!)
Below are the top five benefits of strategic partners for a small business:
- Market– Forming strategic partnerships can help a small business tap into a larger customer base. As a small business, introducing your products to a new market can be expensive and complicated. You may face hostility from established entities, not to mention the lack of finances for marketing. Choosing a strategic partner to help you enter your target market that can save you a lot of money and time as well as help establish some credibility in your target market.
- Resources– Forming strategic partnerships will give you access to resources such as finances, technology, market advice, and information.
- Financial risk burden– Small businesses can form strategic partnerships to reduce their individual business financial risk. For instance a small business owner may decide to jointly invest equally on a project with a strategic partner. This will reduce the financial risk burden as you will get to share the cost if the project fails. This can open up new opportunities to expand your business or pursue riskier ventures since you are not bearing the weight of the financial burden yourself.
- Competitive advantage– Gaining competitive advantage over your competitors will take your business to the next level. A small business may not have the strength to gain a competitive edge by itself. However, the combination of strength and efforts will enable you to compete efficiently and achieve better results. If you operate in a small niche adding a strategic partner can instantly make you highly authoritative and a leader. Plus, the advice and insights from your partner can help you improve your own service to existing customers. As partners, sharing of knowledge and useful insights can help each partner improve their business
- Costs sharing– You can distribute the marketing and sales costs to enable you and your partner do more at lower costs.
As a small business owner below are the several types of strategic partners you may want to consider for your business
- Strategic financial partners – These can be bankers, accountants, financial advisers, or investors. Collaborating with strategic financial partners can help monitor the financial flow in your business and come up with solutions for better financial management.
- Strategic marketing partners – Effectual marketing is crucial for the success of a business. Without an effective marketing strategy, customers will never know about your products and services, your location etc. Forming strategic marketing partnerships will help improve your marketing efforts. For instance, you can form an alliance with a complimentary business and refer customers to one another. It’s not uncommon for a marketing firm to specialize in several areas but not all. Especially today with online marketing being so prevalent, many online marketers do not have print experience and vice versa.
- Strategic suppliers – These can be vendors, distributors, and manufacturers to supply your business with everything it needs ranging from raw materials to office supplies. Forming strategic alliances with suppliers will ensure that your business gets all the supplies it needs on time and at minimal cost. More importantly collaborating with suppliers could lead to the creation of products tailored to your customers specific needs, giving you a competitive edge.
- Strategic technology partners – Today’s business world heavily relies on technology. Strategic technology partners can be website designers, professionals who set up networks and computers, or online marketing service providers to help with your online advertising campaigns. Technology partners are incredibly important for the success of your business in this tech-savvy word. Forming relationships with technology partners technology experts who understand what is best for your business will give your business a competitive advantage.
Tips to help you form better strategic partnerships
It’s important to identify which businesses will be beneficial to form a partnership with. Below are things to keep in mind when forming strategic partnerships:
- Target market – Before heading out to look for strategic partners you need to identify your target market. Identifying your average customer will help you find companies with a similar focus or who typically work with customers similar to your target market.
- Choosing strategic partners – Reach out to non-competitive similar companies. Clearly, you don’t want to form strategic partnerships with a company that deals with the same products or services as you do as you will be directly competing for the same group of customers. But, you also don’t want a partner who is completely off the wall and out of touch with your market. For instance, let’s say you deal with baby products. You should look for a partner who markets to parents or expectant mothers.
- Evaluate your results – Even though you will not see results from strategic partnership initiatives overnight, you should regularly evaluate the results. If you are getting much less than you are putting in, it might be time to cut off the partnership and seek better partnerships that will benefit your business. Assess whether the partnership is meeting your set goals. For example if your goal is to increase your brand awareness, you need to have a way to measure how much the partnership is helping you build your brand.
Strategic partnerships can come in many forms, from cooperation in sharing of resources, skills, knowledge and technology to advertising each other’s products and services or funding projects and jointly servicing a customer’s needs.
While a small business can greatly benefit from strategic partnerships you should note that not all collaborations will be helpful. It’s important to seek a partner with the same vision as your own to help work towards a common goal.
Choose a partner who is willing to work with you to help you both succeed. Outsourcing various services to specific partners who specialize in a specific task or niche will help you deliver a higher quality end product. For example, as mentioned above, forming an alliance with a strategic marketing partner will help you advertise and position your products and services more effectively within your target audience and even potentially offer new products and services you previously were unable to.
As a business owner, trying to do everything on your own can leave you worn out… not to mention the possibility for degradation of the quality of services or products you provide. Working with strategic partners who are qualified experts in their field will help you focus your efforts on refining what it is you do best.