Often, small businesses don't have the resources to expand into related verticals. However, a mutually beneficial partnership with another company can expand business for both—for example, a marketing agency outsourcing to a video production company. Other reasons to bring on a partner firm could have to do with skill gaps. Certain functions are essential to running a business and it may make more sense to outsource those services. You may have a terrific product but not enough expertise to efficiently manage sales channels or deliver your product. Sales and marketing is another expertise that is hotly debates by small businesses, startups and entrepreneurs alike. It doesn't matter how great your business is if no one knows about it, and no one is born with a natural ability to create a market—it's a skill that has to be practiced and honed over time. Even just making the money (collecting from customers, paying vendors and employees) may be an area where it's easier to partner with a full service company like Indinero that can more easily and accurately manage your back office.
Here are a few seed ideas to start growing your partnership potential.
- Define your ideal partner.A good partner is an interesting mix of similarities and dichotomies. You definitely want to find a business partner that complements your business model but doesn't conflict with it. At the same time, a partnership must be mutually beneficial to both parties, so the two companies have to be different enough that they offer each other diverse strengths.
- Agree on roles early and often. A partnership can be as volatile as any relationship but if both parties know their commitments, deadlines and working relationship is sound going, it's less likely you will be stepping on each other's toes. Make sure your team and your burgeoning partner company agree on your mutual working principles, where both companies' strengths and challenges lie, and which responsibilities are assigned to which company. It's also worth checking in every now and then to make sure those perceptions are still working and valid.
- Use community resources when starting your search. Seeking out potential partners in a vacuum is a waste of time and energy. Unless you want to end up in a long-term partnership with somebody's brother-in-law, you have to go out into the community to find sound partners. That means going to local business networking events, potentially talking to editors at your local business report, exploring online communities like PartnerUp or LinkedIn, and talking to business incubators and universities that may be aware of innovative startups that could really complement your own enterprise.
- A business partnership can be dating and not marriage. You're going to be spending a lot of time with a business partner, so it's worth the due diligence to make sure you've found “the one." There are a variety of ways to get to know a potential business partner including working on a test project together; comparing your mission, values and strategy; checking references, backgrounds and credit, and ensuring that they aren't operating under any non-disclosure agreements or other contracts that could potentially impact your partnership. There are also a wide variety of online tools and checklists that could prove useful in selecting and defining your partnership.
- Set the ground rules, but leave yourself an out. Bringing in a new partner is a complex process that requires more commitment than just a handshake. Make sure to create a firm operating agreement that has been drafted by or reviewed by a qualified attorney that clearly delineates what happens to the partnership under difficult scenarios. Not operating under an agreement leaves you and your company at risk. That said, all partnerships are not meant to be. In addition to the guidelines mentioned above, it's worth putting in a clause that allows the partnership to end organically if things go south.