Why Strategic Partners are Important for Your Small Business

strategic partnerships

Small business owners have a lot on their plates these days, and deciding the best way to grow is often one of those daunting tasks that never seems to go away. However, there is one surefire way to grow your business without hiring new people or allocate funds into R & D.

The most influential businesses - both small and fortune 500, utilize a network of strategic partnerships to accelerate and scale growth.

What is a Strategic Partnership?

Strategic partnerships are mutually beneficial relationships between two organizations, who decide to work together to scale both companies; a formalized contract typically signifies this agreement. Not all partnerships require a contract; however, it is recommended if money changes hands for referrals or stock.

When deciding to partner, it's best to serve the same customer set - for example, a marketing firm and a graphic design agency. Both businesses typically have the same type of customers who are likely in need of the other service. If you find your business is regularly recommending the same function, it may be time to consider forming a strategic partnership.

A strategic partnership can start with a handshake agreement and advance as both companies grow and feel comfortable - which could lead to joint ventures. No matter the level of complexity, the benefits of having partnerships in place are substantial.

Why You Should Consider Strategic Partnerships

In most partnership agreements, the parties involved agree to share resources to assist in creating win-win scenarios for all parties involved - including the customers. You can collaborate with individuals or vendors as well to create these types of agreements.

Businesses and individuals will often lead towards referral type programs to gain new clients, whereas vendor partnerships can be used to acquire special pricing, deals, or stellar payment terms.

You can utilize your strategic partnership in a variety of ways. You can choose to share revenue if a customer referral turns into new business. You can use connections to create brand awareness or customer trust, but most importantly, partnerships should exist to serve your customers better.

Form Partnerships with Customers in Mind

When you begin to explore new partnership ideas, there are several things to consider, but the most important is your customers' impact. Ensure you understand your customer and what needs your company isn't capable of completing. In our earlier example, a graphic designer understands that their purpose is artwork, but once the artwork approved, then what?

The customer will likely need their website updated. Along with new collateral printed, the graphic designer can enter into strategic partnerships with these providers to help meet their customers' needs after their portion of the project is finished.

Not all partnerships are as evident as what we've detailed out, so you may need to get creative when you look at your current customer base. Many small businesses face the dilemma of wanting to offer their customers additional services but not being able to provide them directly. Think about what else your customers need to be successful, and pursue those types of relationships. Avoid creating strategic partnerships just to have them, but look for opportunities outside of your current scope.

Treat Partners as You Want to be Treated

As you grow your partners' network, you'll want to ensure you are treating those individuals or companies as you'd like your company treated. They will trust you with established customer relationships, and you'll want them to feel confident in your ability to offer the same level of care. In turn, you'll want your partners to meet the same type of expectations.

Partnerships should help your company better serve your current customers, and assist in scaling your business. If your customers understand they can turn to you for solutions other than what you already provide, you will strengthen your relationship and ensure you'll be working with them for many years to come.