It’s not what you know, it’s who you know. A great network of partners is one of the best ways to amplify your business’s potential. Partners can refer customers to you, provide products and services you need to run your business and even give you great ideas for growth. Which is why it’s important to constantly be looking for new business connections.
The right partners for your business will depend on your goals, the industries in which you work and the size of the firm. What’s important is each side’s ability to bring value to the table for a fair exchange. This may come in a currency other than cash, such as skills, time, products or marketing channels. Partners are also important in helping small businesses grow by allowing them to focus on their strengths, while partners help address weaknesses.
These are some areas where business partners can add value:
Partners are especially important for businesses with fewer than 35 employees that don’t have resources to fully perform all these duties among their other responsibilities.
Premium hiking business Get Outside Melbourne, based in Victoria, has close relationships with its partners, which have helped in developing the enterprise, build credibility and find customers.
“I have an important ongoing partnership with an international outdoor brand called Merrell, which shares my ethos of the power of the hiking trail and helping people find balance,” says founder and sole trader Kane Ford.
He also has an informal relationship with a start-up called Rolla Bottle, which produces an environmentally-sustainable collapsible drink bottle. Eatery Little Local, which supplies gourmet catering for his hikes, is another important partnership.
“I'm all about small businesses helping each other. We've been able to cross-pollinate customer bases and promote each other. The reason I chose these businesses to be my partners is because they also strongly believe in the importance of good mental health, which is one of the major benefits from hiking and the outdoors.”
Figuring out which partners you need
Be strategic about finding partners. You want to work with businesses that share the same outlook as you so it’s a fruitful relationship for both sides. Online channels are a great place to find like-minded businesses and LinkedIn and Facebook groups are a huge source of businesses and brands to admire. But remember, building trusted partnerships takes time. So start small and build relationships slowly.
The best partners will match your business commercially, culturally and in its business lifecycle, says business adviser Jacob Aldridge. “You’ll be more likely to work with similar customers, enjoy the relationship and grow at the same pace.”
Sometimes, you may need to contact potential partners without being introduced by another party. In these cold calls situations, help is the magic word. Requesting meetings from experts to help your business is a proven way to open doors to potential partnerships. “Be authentic in this approach, because pushing sales or other outcomes too soon will stop those businesses from wanting to invest more time in your relationship,” Aldridge adds.
Connecting with suppliers
Identify businesses you can rely on that offer a quality service. Ask for references or testimonials from other happy customers. Pick up the phone and talk to potential suppliers and ask questions about how long your potential partner takes to fulfil an order, what happens if conflict arises and how they operate on a day-to-day basis.
To find suppliers:
- Check out who the competition uses.
- Find out who’s won industry awards in the sector.
- Trial a few until you find ones you love.
Connecting with referrers
Having a network of like-minded businesses who will refer work to your business is a true asset.
There is a number of ways you can find referral partners:
- Ask customers to recommend you and incentivise them to do this by offering them a discount if they recommend a new customer.
- Enter into a reciprocal arrangement with businesses that share the same philosophy as you. This is common among professional services firms – financial advisers, accounting businesses, mortgage and insurance brokers – who often have formal referral relationships.
Shed builders Action Sheds is an example. It started working for schools more than eight years ago and has since constructed many different buildings for the sector. These referrals have given the business ongoing sales it doesn’t have to look for and saves on advertising.
Digital marketing agency Pathfinder Alliance director David Toby is happy to pay for referrals so people are incentivised to pass him work. “We always deliver great value once we have a referral and win the business. Then, when the client reports back to the referee, they are more inclined to continue referring as it makes them look good – and they get a little incentive as well.”
How to network
Finding partners means networking. Toby says this means always having networking front of mind. “Our strategy is to identify gaps in our service offerings and find other complementary small businesses to fill them so everybody wins.”
There are many ways to network:
- Go to local chambers of commerce meetings
- Become a member of your industry body
- Find and proactively approach businesses you admire
- Join networking groups
Many businesses use slower periods to actively pursue new customers. They identify new markets to prepare for when economic conditions improve, says Peter Thorp, director, Australian Bookkeepers’ Centre.
Thorp uses a coffee wholesaler client as an example. “They're talking to a host of prospective new coffee shops, so they have a new customer base when the market is full steam ahead again.”
Rules of engagement
Transparency is key to a healthy collaboration. Be very clear upfront about what each side is responsible for and be prepared to be flexible as circumstances can change. Keeping an open dialogue is critical.
“Every business partnership needs to have benefits for both sides, and also needs to acknowledge any fears or concerns that may limit the relationship. The only way to decide on the rules of engagement for a long-term partnership is for both parties to have an honest conversation about making the relationship beneficial for both sides. This may be a financial benefit, where both sides make more money through the partnership, but for many strategic referral partners the greatest benefit is knowing their clients are protected working with a reliable expert they have recommended,” says Aldridge.
Measuring the value of partnerships
Many partnerships need a written agreement in place that outlines the activity and outcomes sought. That way, both sides have a document that measures the value they expect to receive they can refer to if the other party fails to meet expectations.
However, partnerships cannot always be measured in a numerical sense. Sometimes their value is in being able to pick up the phone and get advice. Nevertheless, if a business partnership is successful it should ultimately lead to revenue and other benefits.
Understanding your financial value will help you secure beneficial, long-term partnerships with businesses you trust and admire. Plus, many of your potential partners are already using MYOB. So why not click here for your free trial?