Forming Small Strategic Alliances

Forming relationships and partnerships with other start-up businesses is a tactic that small businesses have used for many a year, as it presents many interesting opportunities.

The simplest way small businesses can prosper from having a business relationship is cross referral. In the sense that,business 1 recommends business 2 to customers for certain services and business 2 in turn does the same, by referring its customers to business 1. This is a simple referral circle.

Referrals, do however, need to be genuine, the partnership is only as strong as its weakest member and you should take time to seek partners that you feel comfortable passing your clientele onto as their performance is directly associated with your performance.

Take heed, as some problems can occur with referral partnerships:

- If one of the businesses you have a relationship start to drop in standard / level of service or execution etc then you need to consider whether this is a relationship and a business you are prepared to endorse. You do not want to be referring clients who you value to a business you are not sure will provide them with the same level of support you will.
- One – way street. It can occur that referrals only seem to be flowing from one business to the other. If this is case, take time to reflect on whether this partnership is mutuallybeneficial if not, work to make it so, maybe introduce a referral commission

Trust

Relationships / alliances that operate on the principle of trust rather than by payment or incentive usually work best in my experience. Is there a business / individual you have a special rapport with? Take use of this and maybe cross-promote your businesses. i.e Buy this from me and get 50% off on their product! etc . Find ways to utilise your relationships to better your businesses.

Survival of the fittest

There is somewhat of a myth that all business is a ruthless fight to the death in which only the fittest survive. This is for the most part not true.

It is hard, but not impossible to conduct honest business

Mahatma Ghandi

I believe one needs to find a balance between thinking the business world should be one of love and happiness and the ruthless corp attitude. Every business however, often in the early stages of development needs to determine where it is planning to sit and how it is planning to grow within its industry.