Small businesses have much to gain from strong, creative and long-term partnerships. It is often believed that partnerships are only for big corporations that have the manpower and the money to invest in the relationship. Another belief is that partnerships are primarily driven for marketing purposes.
Though both beliefs are correct, they do not capture the benefits for most small businesses. This article aims to help the small business owner decide if a partnership is valuable and what comes in play when it is. Part 2 will be published next week.
Advantages of having a partnership
I loosely define a sustainable partnership as “a mutually beneficial relationship”. Reasons and advantages can be many. The most quoted benefits are:
- Improving image and credibility
- Accessing additional resources (less multi-tasking)
- Extending your reach to a niche market or a more general market (aka competitive advantage)
- Setting your company up for creative solutions
- Increasing referrals
There are four steps any small business should take before talking publicly about wanting or having partnerships.
Step 1. Understand your market position
Before looking at businesses you can potentially partner with, take a good look at yourself. As always, I am suggesting asking yourself a couple of key questions:
- Who is your target market?
- Where can you grow? Tip: this can be a niche market, a new and related service or product, or in capacity
- How strong is your market position?
It helps to do a simple SWOT analysis. Make sure you cover topics such as collaboration, communication, conflict management, and leadership. After all, a partnership is usually for a longer period of time and requires businesses to invest time, resources and money.
Step 2. Know the kind of partnership you want
Depending whether small businesses are looking for a long-term or a short-term partnership, different types of partnerships can be identified.
- Event-focused: create fun events that attract a wide audience
- Media-focused: use the traditional and new media outlets to get a buzz
- Research-focused: larger businesses can support smaller/newer organizations with funding, people, premise and equipment
- Sponsor-focused: fund events or campaigns with a sponsorship
- Product-focused: provide products or services at a premium discount
Next week, I will write part two of small business relationships and share more about selecting the right partner and keeping a strong relationship.