Growing firms never have enough resources to do all the things they want to do, so leveraging other people’s resources is critical. You need not apologise for riding on another firm’s back – in fact, they may be very glad of the association.
What we tend to forget is that customers are very pleased when they can cut down on their search time for solutions, or find all their needs at one location.
They like to think that the different products and services they buy will actually work together, and are very pleased when they can find a supplier who can help ensure they do. So working together with complementary product and service suppliers is often in the best interest of the customer.
In order to take advantage of these types of strategic relationships, you need to first understand the problems your target customer is trying to solve. What other services or products do they need to arrive at a complete solution? Who is supplying those other services or products, and would it make sense for you to partner with them? What benefits do you bring to the partnership that will help convince the prospective partner to work with you?
There are considerable economies of scale in working together on joint bids, joint customer presentations and co-operative marketing programs.
If it is a large corporation you are partnering with, you will be able to take advantage of their lead generation program, the spread of their advertising spend and the number of salespersons they have in the field.
They may be able to do a lot of the prospect screening for you, only bringing you in when they have a qualified prospect. You may be able to take advantage of their office networks to host meetings and presentations, or have them set up local contacts for you before you arrive in town.
Don’t forget that you may also be taking them into deals that they otherwise wouldn’t be able to compete on – it shouldn’t be a one way relationship.
Once you have found the right partner, don’t leave the relationship to chance. Make sure there are clear expectations on what is required by each partner to make the relationship work.
Put the time and effort into working with your contacts to make sure they see you supporting their efforts and thus include you in their long term plans.
At the same time, ensure that you are being fairly compensated with the outcomes. If you are not seeing a positive result from working together, the relationship will not survive.
Working with larger companies in a partnership where each party benefits from the joint marketing and sales efforts of each greatly enhances the reach of the smaller business.
However, you need to be careful who you partner with. Do your homework on their existing and prior relationships to make sure they respect the boundaries and work to make the relationship work.
Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.
Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
