Collaboration and working in partnership with other businesses can be one way to help your business grow.
This section looks at some of the options available to you and how to collaborate for success.
2. Collaborating to win
Advances in technology mean that the world is getting ever smaller and with that the opportunities to collaborate with others are increasing. Small businesses are very much part of this trend and are increasingly realising the benefits of working together.
Collaboration can help businesses grow in a number of ways – by combining and leveraging expertise, by tapping into an extended contact base, and in some cases by sharing resources.
Examples of ways to collaborate
Small businesses can work together to:
- develop a range of products and services together, and so improve the overall value to the customer
For example, a wedding photographer and florist have a similar customer base and may work together to produce a discounted package for soon-to-be-married couples. They have an opportunity to win more business and the customer benefits from a coordinated package of services at a good price.
- sell each other’s products and services to their respective customer bases, and increase their access to their target market
For example, a web developer may link with an accountant and create a special offer for the accountant’s customers. In turn, the accountant may create a reciprocal offer for the web developer’s customers. Both businesses benefit by reaching a new audience, and their customers benefit from a special offer.
- share costs for activities such as trade shows and exhibitions, advertising and other marketing activity, to bring costs down and attract a larger audience
For example, a specialist lighting shop may link up with an electrician to run a joint advertising campaign.
- form strategic alliances or partnerships to share resources and know-how
For example, 2 businesses may work together to submit a joint tender to public sector organisations.
- collaborate on research and development (R&D) to develop new products and services and share the risks, as well as the rewards, associated with new product development
- develop and use a common brand, to present the 2 businesses as a larger organisation
For example, several small businesses involved in the tourism sector may create a joint brand to promote their products and services.
Some of these activities are formal, long-term commitments, whilst others are quick, informal opportunities. The key to all successful collaboration is that it is of mutual benefit, and aims to support the success of all parties involved.
3. Finding partners
So where do you find people or businesses to collaborate with?
Personal introduction is one of the best ways to meet potential partners, so make sure your colleagues and contacts are aware that you are open to collaborative opportunities.
Business networking is another way to find like-minded people. Both general forums and specialist sector or cluster meetings can be useful, as well as the increasing number of events focusing specifically on collaboration opportunities.
A number of industry sectors host brokerage events in which individual businesses have the opportunity to meet with larger organisations and their suppliers to broker a range of mutually beneficial possibilities.
Those looking for collaborators or potential partners are increasingly turning to online means of creating introductions. LinkedIn and other professional forums are particularly popular. Many online tools enable you to be extremely focused in what you are looking for. For example, by combining a search of relevant LinkedIn Groups and using LinkedIn Pulse to outline a specific opportunity, you can pinpoint a small number of highly relevant and appropriate contacts.
As well as these broader tools, there are specific websites which focus on publicising freelance and small business collaborative opportunities.
As with any new relationship, it is important to first build rapport with the people you meet, before discussing business opportunities. You also need to be able to explain what you do briefly, yet in as interesting a way as possible.
When you’re speaking to new contacts, make it clear that you are open to exploring collaborative opportunities. You may also want to be able to succinctly explain any specific partnership opportunities you have in mind.
It is equally important to keep communication going between potential partners. Often the right opportunity to work together takes time to appear.
Public sector contracts
A growing area for collaboration between small businesses is that of public sector and corporate tendering. Big contracts often seem out of reach for individual businesses, because of a lack of resources, know-how, experience and critical mass. However by linking up with other businesses and collaborating, either through sub-contracting or in a joint venture, you can greatly increase your chances of a lucrative contract.
Ask your Business Wales business adviser for more information about public sector tendering opportunities or visit Sell2Wales.
4. Collaborating for success
Good communication continues to be of vital importance once you start working with a partner. Take advantage of the numerous online tools to make collaborating easier. There are programmes that enable you to share documents, store and access project files centrally, view each other’s computer screens remotely, share presentations, and hold meetings one-to-one or with a group. Search online for ‘collaboration tools’ or ask business colleagues for advice on the tools and techniques that work best for them. And always make sure that you (and your partners) keep your online information as secure as possible.
Initially, it’s a good idea to start with a project that doesn’t require too much commitment from either party. For example, you can offer one of your partner’s products to some of your customers – low risk but with the potential of positive results. This gives you the chance to get to know each other, understand how your businesses could work together and see how the relationship can develop.
As the relationship grows and larger opportunities present themselves, it is wise to consider putting an agreement in place that clearly outlines the goals, objectives and key activities so that all parties understand what is involved. If you are collaborating on R&D activities, it is wise to formalise the arrangements at an early stage. Consult your Business Wales business adviser or other professional advisers for information about Non-Disclosure Agreements (NDAs) and other formal collaboration contracts.
Collaboration and working in partnership with other businesses can be a great way to help your business grow. Remember, the key to all successful collaboration is that it is a win-win situation and aims to support the success of all parties involved.
Now you have completed these sections, you should be able to:
- understand the main ways to grow a business
- be clear about your personal goals and what you want from the business
- know how to assess what resources you need to grow
- understand the changes growth brings and how to manage them
- be ready to develop a business plan for growth