Small businesses are disadvantaged because they aren’t equipped with as many resources as their larger competitors, often leaving them to find creative ways to stay ahead in the marketplace. One way small businesses have succeeded at increasing their reach is by working with other companies. Collaborating with other businesses means working together to benefit one another, and there are several ways to work with other corporations to help grow yours. Wondering if collaborating with businesses is right for you? Keep reading to learn about the different ways you can work with other businesses to help yours succeed.
Types of Business Collaborations
There are several ways you can collaborate with other businesses. How you go about it will depend on your goals and business type, but here are a few options to choose from:
Strategic collaborations are a more informal approach to partnering with other businesses. In this type of relationship, both companies agree to use each other’s trademarks and creative assets. Instead of creating an entirely new company, the companies work together to expand their reach in a new market, allowing them to work towards the same goal.
Strategic alliances allow two different companies to work together to achieve the same goal. An example of this would be a Starbucks in a Target. Both companies are still separate, but Target benefits because it brings in more customers to browse, and Starbucks benefits because they’re in a convenient location. Additionally, software companies can form these strategic partnerships using each other’s software in various programs. For example, an RPA platform can work with a customer service platform to improve automation efforts.
Joint ventures are a type of legal agreement in which two companies invest in creating a third company. The parent companies usually split profits, and a joint venture gives them access to assets, knowledge, money, infrastructure, and in-office and remote employees of both companies. As a result, the new company ultimately has a head start in a new market and doesn’t have to start over.
A business merger is when two companies combine their efforts, creating a new business that’s better than the two separate businesses. Companies merge to expand their businesses and fill in gaps. It also benefits shareholders and increases the value of the business when done correctly. Companies can also unite to become more competitive in the same market. For example, two streaming services can merge to beat the competition.
Other Types of Collaboration
Of course, there are less legally-binding business collaborations that can benefit small businesses. Ultimately, you can partner with any business, as long as they’re not your competition, and try to find ways to work together to reach the same goal. For example, two athletic brands may collaborate to increase sales if they sell different products. Using each other’s products in various advertisements to promote one another.
How to Collaborate With Other Businesses
Ultimately, the more legally binding alliances and collaborations will require more work. Most companies have these goals in mind from the beginning. For example, you might create a product, brand, and business with the goal of a merger or acquisition. Since small businesses aren’t appealing to other larger businesses who’d want to combine their efforts to create a whole new business, it’s up to you to find alternative ways you can partner with brands. Here are a few tips to help you find companies to work with:
Do your research to find other businesses similar to yours. They should be in the same industry but sell different products or services. It’s also helpful if they’re the same size because they’ll be more willing to work with you. If you choose a significant competitor, they probably don’t need you in the same way they need them. Picking a business similar to yours is the best way to ensure your relationship is mutually beneficial.
There are several platforms that help you automate the process of finding a suitable collaboration and tender budget management. These platforms make it easier for companies to find suitable partners and ease their operational workflow.
Once you have a list of businesses, it’s time to reach out. Try looking for the CEO or another executive’s contact information on LinkedIn and send an email introducing yourself, your business, and your pitch.
Choose a Way to Collaborate
You don’t have to know the ways you want to collaborate with other businesses yet. When you’re first reaching out, you’re building relationships. Eventually, you should start planning a way to work with other businesses. The easiest way is to partner with them for promotions or local events to expand your customer base. However, you can invest in the same advertising campaigns with both companies featured.
Small businesses can benefit from cross promotions. For example, if you own a local diner, you can partner with a local ice cream shop to give customers a discount on their desserts.
Build on the Partnership
You should continue to promote the partnership for as long as it’s mutually beneficial to both parties. For example, a digital marketing agency may partner with an SEO agency to offer a wider range of services, which allows both companies to earn higher revenue. However, in this case, you must continue to promote your offerings to ensure people know about them.
Your main goal should be maintaining your partnership by referring work or business to them. Sending more work their way can ensure that the relationship is mutually beneficial for both companies.
Collaborating with other businesses is beneficial for both companies to expand their reach and grow their profits. However, how you go about it will depend on your overall goals. Most small business owners don’t aim to be acquired or merged with others. Instead, they want to maintain control over the business while finding new ways to market and promote their offerings.
Can collaborating with other businesses benefit your small business? Business collaborations benefit all types of businesses, large and small. For example, some of the largest corporations in the world have strategically aligned themselves with others to grow their customers and ensure long-lasting success.
Ashley Nielsen earned a B.S. degree in Business Administration Marketing at Point Loma Nazarene University. She is a freelance writer who loves to share knowledge about general business, marketing, lifestyle, wellness, and financial tips. During her free time, she enjoys being outside, staying active, reading a book, or diving deep into her favorite music.