Business facts are amazing. Pay Simple, a blog that supports small businesses recently collected some data on startups in the US. It found that there were more than 30 million small businesses in the economy and over 500,000 more starting up every year. That meant that there was a new company launched every minute of every day in 2015.
With so many startups launching at once, some are bound to fail, either because their ideas aren’t good enough, or because they’ve misjudged what the market wants. Many, however, are deciding not to go it alone and instead partner up with other businesses in order to piggyback on some of their success.
Partnerships can happen anywhere. They can occur on a small scale where one trader offers their expertise to another. Or they can happen on larger scales, where the larger company outsources some of its functions to the smaller company.
Securing partnerships isn’t easy, however. So how should you reach out?
Tell Your Business Partner That You’d Like To Try Partnering As A Test
Companies already face significant risks, so the last thing they want to do is enter into a strange new relationship with you which may or may not pay off. One of the things that you can do to assuage their concerns is to approach the partnership as a test or a trial. Make it clear that it’s a temporary arrangement that can be canceled at any time if they’re not happy with the way things are working out.
Next, make sure that you fully involve them in all the fiddly details. For instance, what is their cut of your sales? How will you share customers? And what exactly will your role be in the relationship?
Sometimes, figuring out a solution that works 100 percent for both parties is difficult, and you may have to go back to the drawing board. But as Business Insider notes, successful partnerships are usually based on both trust and aligned ambition. If you have a good understanding of what your partner wants, you can change your strategy to make sure that both yours and their objectives are fulfilled.
For many CEOs, reaching out is the scariest part of forming any business partnership. But if you never try, then you never know whether a partnership would have worked or not.
The reaching out phase is especially important for young traders wanting to partner with established players in their industry. New contractors need to reach out in order to secure lucrative work and often that means working with a third party company.
When you approach another company, you’ll want to make sure you ask the right questions. What qualifications do you need to have? If you need to drive a vehicle, how old do you have to be to go on a trader’s cover note? What hours does the company work? And so on. The reaching out process should be all about gaining trust, asking questions and proving your worth. There are all sorts of ways you can reach out to other people in your industry, including via LinkedIn or by introduction through a business associate.
Start Searching For Businesses In Your Industry
The best partnerships are those between companies that sell complementary products. For instance, if you sell flowers, then you’re best partnering with a company that sells vases. Or if you run a car dealership, then you could invent a reciprocal relationship with a local service center. These partnerships work because, in all these cases, neither company is able to offer a comprehensive service by itself.
There are many examples of partnerships in the knowledge industry too. Take the case of My Corporation, a business that helps people form their own LLC companies. My Corporation does all the legwork, sorting out all the legal documents and preparing a company to begin trading in the market. But it doesn’t have any facilities to help its customers with things like accounting or setting up their credit card facilities. As a result, they’ve created partnerships with other companies who offer these ancillary services, ensuring that they can always forward their customers to the relevant service, should they need further assistance.
Often you can find out whether a company is open to partnerships by browsing their website and seeing whether they are involved in any partnerships already. Almost always you’ll find that companies who already have one partner are more than willing to take on more, so long as there is a clear business case for doing so.
Discuss Your Cross-Promotion Strategy
Promoting a product is expensive, especially if you’re using tools like Adwords or trying to place magazine ads. This is why cross-promotion is such a game changer. The principle behind cross-promotion is actually rather simple. All it entails is one company slipping their advertising into the complementary company’s marketing material. For instance, you could find ways to include information about your business in your partner’s newsletter, alerting their customers to your product.
Another common tactic is for both companies to share audiences on social media. Each company could share links and posts designed to get their existing subscribers to sign up to the other firm, increasing their total exposure online.
You can also try other methods like cross-blogging, where each business writes blogs about the other on their own site. This helps to increase the number of backlinks to each site (useful for SEO) as well as providing a direct channel from one site to the other.
It’s important, however, not to overcomplicate things. Although there are dozens of cross-promotion strategies you could try, it’s important to keep your ideas simple so that the partner business can understand your proposal. Stick with just one or two ideas and make it clear how they will help not only your business but theirs as well.
Look For New Partners
Finally, it’s worth mentioning that business partnerships aren’t like marriages: they don’t go on forever. Instead, businesses change their partners as their needs change, pairing with new companies in a way that suits them best. Traders who want to expand their skillset know that they’ll have to take on new partnerships.