Business partnerships come in many sizes and flavors: A young boutique airline awards "miles" to a credit card's users. By piggybacking on the name of an established global bank, the airline brings in affluent consumers. For its part in the alliance, the bank gets more transactions from customers looking to accrue rewards and get a free trip.
Closer to home, a hardware store that's been in business for three generations gives out 20 percent-off coupons for a local appliance-repair center. The younger business gets an immediate stamp of approval from a respected local brand; the store wins goodwill by offering discount coupons. Such potentially powerful partnerships are out there and waiting to be tapped. You just need to know how to find and grow them.
Here's an example: Your restaurant operates between 6 p.m. until midnight, daily, leaving 16 hours of downtime, not bringing in a dime of revenue. Then, a local entrepreneur proposes that she rent the space between the hours of 8 a.m. to 5 p.m. as a co-working space. In addition to paying a flat fee, she offers to give you 15 percent of every annual membership deal she signs.
You reap income, without devoting time or money to sales, marketing, or additional management. What's more, your brand is front and center with those co-working professionals. The entrepreneur makes a profit from memberships and saves money by renting a ready-built space.
In developing and managing Fora Financial's partnerships, I build and nurture similarly beneficial and growth-focused partnerships with Equipment Financers, to name one burgeoning field. The financer's clients, typically small- to medium-size construction firms, need funds to buy construction equipment, but can't get approved for bank financing.
Fora Financial, acting in concert with the Equipment Financer, provides capital that may otherwise not be available and results in more transactions for the Equipment Financer. We get the opportunity to build relationships with each of those construction firms — ventures that may need a jumpstart as they work towards growing into mature companies.
Sounds pretty great, right? But remember, A partner makes your brand either better or worse, so choose one carefully. Here's what to look for.
Gain the freedom to do what you do best.
Partnerships can provide a more targeted path to growth. A solo-practice lawyer may be the best litigator in the state, but he can't manage bookkeeping and even payroll for two employees without his legal work taking a hit. Meanwhile, the accountant around the corner would like to offer her clients proven and trusted legal services. By opening a referral-based partnership agreement, each gets their needs met, growing together.
Win increased trust and status.
One smart shortcut to credibility for a younger business is to align with a trusted brand. The younger business gets an immediate boost in trust and credibility by association with the established brand — like that appliance-repair center. In exchange for its support, the more mature business may gain capabilities or market share it may not be willing to invest in deeply.
Which leads to the next great opportunity of partnering...
Extend your promotional budget.
Partnerships can open the door to fruitful marketing experiments, in the form of attention from new markets you might not be reaching with your current marketing budget. These may be markets too large or too small to invest in, or complete blind spots in your view of the market.
A great example of this is the partnership between a local gym and a nutritionist's practice. Because of its upscale location and cost of membership, the gym has been focusing on health-conscious prospects in their twenties and thirties with an expensive direct mail campaign. But after working together for a while and participating in the nutrition practice's Zoom-based webinars, the gym discovers that many of these older prospects want to take fitness classes during the day, when trainers are scouring the floors for new business.
In this scenario, the gym has opened the doors to both new membership and training opportunities, while expanding its range of services with nutritional counselling — all for far less than it would cost to target this new market otherwise.
"If you're not considering partnerships, you're not interested in realizing your firm's full potential."
Tap the power of data-driven sales and promotional decisions.
One of the more exciting developments in partnerships is on the tech front. A wide variety of data-sharing tools can support smarter, more focused marketing partnerships.
Using Data platforms such as Crossbeam, on the high end or the easy-to-use Miracle Salad suite, a partner can mount their marketing data into the system, where it's coded and secured. When their business partner shares their data, areas of overlap become visible to both parties. It's a great starting point to identify common goals. And vice versa, you're going to give me access to people that I'm not engaging.
Know these three pre-partnering considerations.
Before jumping into a partnership, consider these points.
Establish your priorities. Align with your potential partner on what they want to get from the relationship in the short- and long-term. For example, if you're offering a partnership in which you place your products on the partner's site, giving them a cut of your revenue, that may actually not be what they need right now.
Project costs from the start. List your hard and soft costs, then determine if the time and energy you'll be putting into the partnership is worth that expense. This is a common reason for unsuccessful partnerships.
Don't limit yourself. Thanks to Zoom and other digital community-builders, you may want to cultivate partnerships in other states, regions, or even countries.
Partnering can put your business on a much faster growth plan, at a lower cost than going it alone. Just be sure to do your homework and keep your firm's original objectives in mind.
Since 2008, Fora Financial has distributed $3 billion to 35,000 businesses. Click here or call (877) 419-3568 for more information on how Fora Financial's working capital solutions can help your business thrive.