The beginning of the year is always a good time to assess what worked well (or didn’t) the year before, and consider different income streams for your business. If you are just starting out, then I would say consider all options ahead of laying out your plans. Regardless of how dire it appears economically, this is still the time to set up a business or continue if you have already set up – you just have to be flexible and open-minded.
So in the spirit of being open-minded and flexible, I wonder how many start-ups have considered going into collaboration or partnership as a one-off or longer – depending on the offering? If you’re thinking going into collaboration or partnership defeats the purpose you set up as a solo/entrepreneur in the first place, I get it. I know and understand the feeling of seeing a product or service as unique and wanting to go it alone – I have been there! But if you remember one of the main objectives you set for your business, then hear what I have to say.
When I say collaboration or partnership, I don’t mean going to set up or form a ‘legal’ entity, but look at other businesses – start-ups or established that you have some synergy with, and offer the opportunity to leverage your product or service. Here are some reasons why you may want to consider this option:
- Make more profit
- Save costs
- Offer added value to your customers
- Gain more customers
- Extend your brand
Your main objective as a business is to be PROFITABLE! And the question you should ask yourself is how can I make more profit? I don’t mean reaping off customers, but offering better value so they spend more with you and tell others about you. In my view, with the economy the way it is, you can be creative and brainstorm what options you and your business have to drive things forward in 2012.
If you think this is something worth considering but wondering how and where to start, here’s my quick (personal) guide of things you should consider:
While profit is main objective, you can’t achieve that without putting your customers at the heart of it all. Sounds a bit too obvious I know, but you will be surprised how many people leave that crucial detail out when things are not going so well. Like I mentioned, brainstorm – what added value can you offer your customers? Who (other businesses) do you share similar customers with? (You could consider demographic groups etc.) How can you improve your customer’s journey with the addition of another product/service? You may be thinking, well if I can come with a ‘new’ product or service, I should just do it myself! Not a good idea in my opinion! Stick to what you are already good at and look for the add-ons from someone or somewhere else.
The next thing to consider is the ‘personality’ of the business or business owner before you go full steam ahead. Do you ‘like’ the person or the business they run? I think this is important if you are going to ‘working’ with the person – even if it’s a one-off. Profit is great, BUT if it comes at the expense of your personal happiness then it’s not worth it. This may seem to contradict what I said about your main objective being profit, but you set up your business to enjoy and have a better or different quality of life – on your own terms, so this is non-negotiable for me.
This also affects your ‘chemistry’ with them; and if you are in the service industry, this is super critical! I recently went to one of these collaborative workshops which demonstrated what great chemistry looks like. Both ladies were finishing each other’s sentences.
Do you both share the same values? A business is really a reflection of who you are, and if you have opposing values with the person/business you are considering, then you’re not going to be able to look yourself in the mirror months down the line – I promise you. If you start compromising on the essence of who you are, you will only be hurting your business long term.
Other practical things to consider are:
The actual offering
If you are running a training workshop for instance, who will do what? What will it look/sound like? Make sure you work it all out to the very last detail. Don’t leave anything to chance.
Will this enhance your brand or not? Be honest with yourself when you are considering this option, and be clear if this collaboration/partnership will either hinder or enhance your brand – not just in terms of value, personality etc., but in terms of your offering. Will your customers understand the ‘what and the why’; or will they become confused with it all? There’s no harm in asking a few trusted customers or friends what they think – it is better to do this than see all your hard work go down the pan!
Depending on if your offering is a product or service, you should consider where and how yours and their customers will access this joint offering. If you are offering a service – say training, and both of you are based in opposite directions, will either of your customers be prepared to travel across when they have been used to meeting with you at a closer location? Simple I know, but with customers having a wide choice to select from, a ‘simple’ thing like location could sway a decision to attend a different training course.
Now, this is important because it relates to profit that I mentioned earlier – the main reason you have considered this. How will the profits be spilt? 50/50? If not, why not? What if one party has done more ‘marketing’ of the offering than the other, or most are his/her customers access it more than yours, do they deserve a bigger share? Make sure all that’s ironed out before you start.
A good starting point if you are considering this, is twitter – you’ll be surprised who’s on there. I find twitter presents great opportunities to find new businesses and it is an easy way to find out personalities with the type of tweets and re-tweets they send, who they follow etc. in one go. Why not give it a try and let us know how you get on.