How to Grow Your Small Business with Strategic Alliances
As a small business owner, you want to do every possible thing to ensure the success of your business. However, time and money are generally not very available in the early stages of business development.
That is why you should consider developing a strategic alliance with other businesses. One of the best ways to pool your resources for future growth is to form small business alliances. These can help you reach a larger audience and gain access to tools and resources you might not have otherwise.
What is a Strategic Alliance?
Strategic alliances are agreements between two or more separate businesses to collaborate on their corporate goals, such as manufacturing, development, sale of products and services, or even marketing and advertising.
Strategic business alliances are formed for the purposes of joint marketing, sales, distribution, and production, as well as design collaboration, technology licensing, and research and development (R&D).
Vertical relationships between vendors and customers, horizontal relationships between vendors, and local/worldwide relationships are all possible. As a result, small business alliances are frequently formed in the form of joint ventures or partnerships.
It is important to note that strategic alliances between small businesses have different forms; they could be affiliate programs, co-branding, co-marketing, and referral programs, among many others.
For instance, an affiliate program refers to a partnership model in which you reward one or more affiliates for each lead, visitor, or customer.
On the other hand, a referral program is when you incentivize partners to recommend your products to other businesses.
7 Ways To Grow Your Small Business with Strategic Alliance
Here are some steps you can follow to make small business alliances more strategic and productive:
1. Get Your House in Order
Your business’s financial position, employees, systems, and processes must all be in good working order before you consider developing a strategic alliance.
Alliances aren't a solution for your business problems; however, they will bring such problems to light. It’s always a better idea to sort out the internal shortcomings before expanding to alliances.
2. Determine Your Goals
Setting goals for your alliance program will help you stay organized and focused in your efforts. Ask yourself these questions before starting an alliance:
- What do you want to gain from a strategic alliance?
- Do you sell products regionally and wish to expand your reach by partnering with a business with a nationwide sales team?
- Do you want to make it easier for your consumers to do business with you?
- Do you need new manufacturing techniques, technology, or expertise?
Knowing what you want out of a relationship will help you choose which partners to approach.
3. Identify Potential Strategic Partners
Look for businesses that not only have the resources you need to succeed but also share your business' underlying beliefs. This makes the relationship run more smoothly, and also makes more sense from a branding standpoint, in case your business is dedicated to social responsibility.
You should consider developing strategic partnership with businesses that share your values and modus operandi. This cuts costs on extensive orientations and trainings.
4. Do Your Due Diligence
Check out a possible strategic partner’s reputation—both online on social media and offline, before approaching them. What is the strength of their brand?
It’s a good idea to reach out to businesses which have previously collaborated with your potential partner or customer and inquire about their experiences.
5. Get To Know Each Other
Use social media and real-life relationships to introduce yourself to important decision-makers once you’ve discovered possible strategic partners. Take the time to create a friendship before pitching any form of cooperation.
Learn everything you can about the business’s current state, future plans, and long-term objectives. This will make it easier for you to spot opportunities and confirm if the organization is a strong, strategic fit.
6. Make It a Win-Win
It’s now time to make a strategic partnership proposal. Make a proposal that stresses the benefits of the partnership to the other business. Of course, it will benefit you, too, but the important thing is that the proposal is mutually and equally beneficial for all organizations.
7. Clear Means of Communication
Don’t just sign a paper and go back to business as normal; a strategic alliance isn’t something you can "set and forget." To receive what is wanted out of the partnership, both parties must invest time and effort.
Maintain persistent communication, have regular meetings to analyze your partnership’s results, and make any necessary improvements as they arise.
Benefits of Strategic Alliance for Small Business
If you follow the above procedure to build strong small business alliances, you stand to get the following advantages:
- Reach new customers: Partnerships give you direct access to an already established customer base. The other brand vouches for you in the process and provides direct exposure that wouldn’t be possible otherwise.
- Share resources and expertise: Rather than hiring experts to fix parts of your organization where you have little experience, forming alliances with other businesses can bridge that skill gap. It’s a low-cost way to investigate new possibilities without risking failure due to a lack of experience or resources.
- Grow your reputation: Partnerships give you immediate access to a pre-existing customer base. As a result of this, the other brand stands behind you and provides you with direct visibility that you wouldn’t have received otherwise.
- Increase revenue: If you can take advantage of any of the previously listed benefits, there’s a strong possibility that you’ll be able to boost your revenue, as well. This could be due to a variety of factors, including growing your client base, pooling resources and costs, or introducing a collaborative product.
For a strategic alliance to succeed, it needs to be a part of your company culture. Implement partnership training relevant to your particular situation/company.
Also, tap from the invaluable opportunities provided by reputable PRM platforms like Kiflo to manage partner onboarding, lead generation, reward programs, content sharing, training, and day-to-day management related to your partners for greater outputs.