The Importance of Strategic Partnerships for Small Businesses

Small business owners have a never-ending to-do list on their desks, and determining the best way to grow is often one of those never-ending tasks that will ultimately take up a majority of their time. However, there is one surefire way to scale your business without having to find an influx of cash or add additional employees - form strategic partnerships.

What is a Strategic Partnership?

Strategic partnerships are mutually beneficial relationships between two businesses that work together in efforts to grow each other's organizations; a contract formalizes most. While not all partnerships need to be formalized, it is recommended if money is changing hands - i.e., for referrals or revenue shares.

Partnerships are most beneficial when both businesses serve the same type of customer. For example, a graphic designer and a marketing agency would be a solid partnership as both have clients that are likely in need of the other's services. As a rule of thumb, if your company is consistently receiving recommendation requests for a specific service you don't provide, you may consider allying with a reputable company that offers that service.

Strategic partnerships can be as simple as a handshake or a notarized agreement filed by lawyers. No matter the level of complexity, there are always benefits to having partnerships in place.

Why Your Business Needs Partners

Most partners agree to share resources to create winning scenarios for everyone involved - including customers. You can work with companies, individuals, or even vendors to develop strategic alliances. Business partnerships often lean towards referrals with the goal of new clients - whereas agreements with vendors can include monetary compensation.

Strategic partnerships can be implemented in a variety of ways. You can share revenue if a referred client signs up for service. Or use your partnership to raise brand awareness or build customer trust by partnering with established organizations. More than anything, your partnerships should benefit the clients you serve. The more you connect them with partners who can help with their needs, the better you serve them.

Create an Understanding

As you build your partnership network, you'll want to treat your partners as you would your customers. Remember, they are entrusting their client relationships to you, and want to feel confident about your ability to serve with the same level of care as you also expect.

Schedule regular meetings with your partners or alliances and review what you are doing to make your relationship a success. Partnerships should be you better serve your clients and retain their business. If your clients can turn to you for introductions and solutions other than what you already provide, you'll strengthen your relationship and ensure their business for years to come.