Should you as a new and existing business build alliances with other businesses?
As a new business this is a subject that we thought we should explore further.
We are told that the best way to build your business is to join a network of likeminded business people and that you should build “relationships” with people that you “know, like and trust” and over the last three years, through employment and being self-employed, we have been to quite a few networks and met some great people but would we trust them enough to refer them to our current client base? What if they don’t give the same level of service we give? Will this reflect badly on us and our business and what we are trying to achieve?
We have looked at this subject in depth over the last few months and discussed it with people that we “know, like and trust” and not surprisingly we have received a mixed reaction. Some pass referrals between each other like offering to share a bag of sweets without having worked with and experienced the service that they are recommending and are surprised when it collapses and have found that they have lost clients as a direct result of a bad recommendation. Others have spent years building relationships and experiencing the offering in their own business so feel that they are making a good referral and are again surprised when it fails.
As a new business we want and often need to build these relationships quickly so that we can grow but how quickly should we force it? Or is there a formula that we should follow to make it run smoothly?
Through our research we have found that generally there are 5 basic types of business alliances and recognising which works best for you and your business is key.
1. Sales Alliance – An agreement to sell products or services that complement one another.
2. Solution Specific – An agreement to develop and sell a particular business solution together.
3. Geographic Specific – An agreement to market products and services in a particular geographic area together.
4. Investment – An agreement to combine funds for shared investment
5. Joint Venture – An agreement to share control, profit and loss in a particular economic undertaking.
Our business is service based and therefore we have identified that by making good Business Alliances we can add some value to our proposition, ensuring that our clients receive the full 360° service that we believe they deserve.
How do you go about building good Business Alliances and making them work?
- Identify the services that your clients would most benefit from and take a targeted approach to meeting and getting to know businesses that offer those services. Different solutions require different alliances and therefore a mixture of the 5 basic types could be relevant.
- To ensure that the alliance works and continues to work it is essential to build trust and the best way to do that is to spend time with the other business and really getting to know them and their offering. Go to each other’s client meetings as an observer, go to trade shows together or even do a joint presentation. That way you really see how they operate and will see if they are the business you want to work with.
- Make sure you each have a Non-disclosure agreement so that both businesses are protected, identify each other’s intellectual property and protect that; you wouldn’t want someone to pinch your business ideas and market it themselves.
- Have a written agreement detailing what each party will contribute; it should also include an exit strategy.
- Meet and discuss how it is progressing regularly; this is also an ideal time to deal with any issues immediately.
At SeaMount Business Services Ltd we are in the process of doing just that. Targeting and building relationships with businesses that we feel complement our offering and add value to our clients businesses.
Currently we have built informal alliances with a HR and Training company; a Legal practice; some banks and a Wealth Management company, with many more due to join us soon. Once the relationships have been formalised we will sign post them on our website but until then we are willing to give you more details if you contact us directly on 029 2035 1610 or firstname.lastname@example.org
Author: Kath Hiscock, Director of Client Services