In a world where social media and product association are rampant, small businesses know there’s great strength in numbers. Business owners benefit considerably when they collaborate with other entrepreneurs to build branding and ultimately thrive together.
The Competitive Advantage of Collaboration
There are costs associated with any venture, but when you team up with a company that provides goods or services that you don’t, you significantly reduce the time and money you put into a new channel. Another word for collaboration is bartering—both businesses provide expertise and mutually beneficial services, strengthening each other in doing so.
The more businesses you partner with, the larger your potential client base grows and the greater the demand for your product becomes. Whether you’re an e-commerce site or a brick and mortar, by bartering you gain an advantage on those who aren’t partnering up.
Finding the Right Partner
To ensure you’re collaborating with a “merger” rather than a “moocher” and to safeguard yourself from the biggest partnership pitfalls, ask yourself the following questions before entering an agreement:
- Can their industry or sector accommodate the needs of my company?
- Is this partnership professionally or personally driven?
- What am I committing to this partnership?
- What are my goals and objectives for this partnership?
- Specifically (and with as much detail as possible), how will the two businesses collaborate?
- What data, intellectual property, patents, and secured information can be shared/obtained while collaborating?
- What is the ROI of any funds allocated to this partnership?
- What is my business NOT offering that this potential partner IS offering?
While professional collaboration may be attractive, if the data doesn’t back the decision, it’s safer to go it alone or look for other partnership opportunities.
Keep It Personal, Keep It Local
Small businesses may aim for global expansion, but attention should focus locally (or at least on a localized market) in the early stages. A business that offers a physical product the local community needs—which is generally why the product is offered in the first place—should buy local and establish a local entrepreneurial group that meets regularly. These groups spark innovation, improve marketing strategy, and increase community interest in small business ventures, which equals higher profits.
Most of all, keep it personal. It’s your business and your livelihood at stake. If you have doubts about collaboration, get a professional opinion. If you can’t get one, walk away. Better to err on the side of caution than risk an ill-informed partnership.