Business Partnerships
Written by Mary Moore Thursday, May 13 2010
It is understandable why many small business owners are less than thrilled with the prospect of joining forces with other businesses, especially those that operate within the same industry. After all, what good could possibly come from helping the competition?
In my company, we have used the power of a strategic partner to enhance promotion opportunities with non-competing small businesses that share a similar customer base. Through a promotion with a neighboring shoe retailer, we organized a wine tasting event. This allowed us to gain access to a group of VIP clients who shared a common demographic and were perfect prospective return customers for our cooking school and retail shop. The customers who attended this event got a quality night out for a wine-tasting event and a look into the services that The Cook’s Warehouse provides. Some of the customers who attended this event were in my shop for the very first time.
In my industry, an alliance is not always possible with my direct competitors. However, I actively communicate with other like small businesses around the country, especially those outside of metro Atlanta. We often hold teleconference briefings to discuss the latest cooking trends, hot products, vendor relations, and managerial topics. We can quickly learn from each other what might otherwise take weeks, months, or years to learn. Seeing what others tried that worked, or not, is extremely valuable. A great example is a new “dine and cook” series we’ve started that has sold out each time. We might have never come up with that idea on our own. That is the beauty of the well-crafted strategic alliance. Both companies benefit and realize a marketplace advantage they would not have been able to achieve independently.
The next question may be where to find a partner that can provide mutual benefits. The marketplace is rife with potential partners for strategic alliances that can directly benefit a business. Potential partners can be competitors, although they are more often found in businesses that provide complementary goods and services. Don't be afraid to look outside your industry for alliance partners. Sometimes very successful partnerships can be created between companies that have seemingly little in common. Effective partnerships can also be formed with nonprofit or charitable organizations.
Strategic alliances can be casual or formal in nature. If you choose, you may enter into an alliance through a long-term written agreement. This type of written partnership will allow both businesses to define the benefits. Others will operate on a largely informal basis, with no written agreements and a casual atmosphere between both parties. The nature of the partnership is not the key issue. The important aspect is to ensure that both parties are aware of the expectations and obligations in the agreement, as well as the direct benefits of the alliance. Regardless of how your partnership is crafted, it is important for all risks to be shared. Sharing the risks, as well as the rewards, is the most basic idea of the strategic partnership. When the results begin to flow to your business, you will be able to see the clear benefits that a mutual partnership can provide.
Mary S. Moore is founder and CEO of The Cook’s Warehouse with three locations in Atlanta. Both a retail store and cooking school, The Cook’s Warehouse also runs an online store and a catalog. Moore opened her first location in 1995. The business expanded to include a cooking school with more than 600 classes taught annually by renowned chefs in four kitchens.
