I’ve seen some wacky partnerships between companies from my advertising agency days, including plenty from my own teams. A partnership between local Washington D.C. food vendors and Trojan Condoms to deliver an unforgettable tailgate and a “sampling experience” that created relationships with thousands of NFL fans is a personal favorite, but that’s a story for another time!

But the funny thing about good partnerships is that they don’t just happen randomly. They cost money, effort, and time to plan, develop, and execute. We can probably all see how DoorDash delivering Taco Bell anytime of day is a no-brainer in today’s world. But, trust me when I tell you that plenty of late-night agency fees were incurred trying to invent a sh*ttier version of a DoorDash-like app to sell more taco-like objects before the right technology existed. And even if the idea was spot on, we might have needed outside expertise or tools to execute, eating into our profit margin.  

Because small businesses are, well, small, partnerships can be a great way to grow — and for less than you might think, too. Since even the best partnerships aren’t initially obvious or possible, make sure your efforts are focused on developing one that serves a purpose. Here are a couple ways partnerships can help small businesses, and how to judge a partnership’s potential value:

Cross-promote each others’ services to increase customer reach and lead generation

This is probably the easiest path to get started. Think strategically about other businesses that complement your own. Imagine you’re an HVAC company owner — you’re likely not competing with a landscaping company and you probably see a lot of the same customers. Creating a relationship where a trusted landscaper can recognize a house with an older model AC unit and an HVAC technician can spot a dangerous walkway in need of repair might make for a low-effort, high-reward lead funnel. And sending periodic email blasts offering free consults, or even discounts, on each other’s services to your unique audiences can really help scale.

Maximize marketing budgets through co-hosted events 

Let’s say you’re a regional law firm with a high concentration of environmental services providers as your clients, and you’re looking to expand. Since most law firms don’t spend significantly on advertising and marketing, another way to grow could be by developing a co-sponsored event series highlighting best practices relevant to the legal and environmental services fields and bringing together experts and prospects to learn — all while creating high-quality content from the event series to use across different marketing channels throughout the calendar year, or longer. Both groups get a win-win by positioning themselves as trusted experts and reducing the time and costs needed to develop evergreen marketing content that resonates with the desired audiences.

Don’t chase shiny objects that cut into your profit margin

It’s just as important to know when not to enter into a partnership that’s going to drag time and focus away from what already makes you money. For example, one of our clients is a Shopify-based clothing boutique owner who has always dreamed of opening a brick and mortar store, and was evaluating a “store-within-a-store” opportunity in a hair salon. While we hate deferring dreams, we love saving clients money, time, and aggravation. We uncovered that the greater partnership value would come from working directly with the salon’s influential stylists by leveraging their personal social networks. By gifting half the clothes she planned to sell at the salon to the stylists, our client avoided paying expensive build-out costs and spending time maintaining the space and her inventory, not to mention having to split profits with the salon on anything sold. More importantly for our client, she built a network of traveling stylists that continually grow her revenues as affiliates, increase her brand awareness, and provide enough user-generated content (UGC) to use for product shots, social media campaigns, and more. 

A good idea for a partnership isn’t a guarantee of anything. The best partnerships are built on solid strategic thinking about their potential value and impact on your business, and on your proposed counterpart’s business too. And of course, make sure to run the numbers to ensure it’s a profitable relationship for all. 

Third Act loves giving small businesses the outside perspective to rethink how partnerships can work. Let us help you get started on a win-win partnership path today.