Growing Your Business - By
Increasing Revenue
Partnering to Increase Profits
By
Jacquelyn Lynn
Even
with the aid of technology, there are limits to what a small business can
accomplish by itself. You may understand that, but what if you still want to do
more? A workable solution is partnering. Though it takes many shapes, the core
of the partnering concept is that two or more businesses team up to achieve
something together that they can't do alone.
Partnering with other businesses can help you provide a broader product or
service package to a particular market segment; it can give you the resources to
handle a single major project for a client; or it can organize the resources you
need to get certain components of your customers' needs met. In all of these
scenarios, partnering creates the opportunity to present your clients with the
same vision of seamless capacity that large corporations do--while working from
your home or small office in a relationship with other similar-sized businesses.
There
are no fixed rules for individual partnering agreements. The concept is rapidly
evolving, with some partnering associations looking like a stand-alone business
that is separate from the partner's primary companies, and others more closely
resembling outsourcing or subcontracting. Some business owners partner only
under carefully-drawn contracts; others do it on a handshake. What's important
is that you develop an arrangement for work performed and compensation received
that satisfies everyone involved.
Partnering allows very niche-oriented businesses to serve clients who have
complex needs, and lets them compete against large firms that have all the
necessary staff in-house. For example, a homebased human resources consultant
could team up with a small law firm, an accountant, a management consultant and
a marketing person to provide a broad scope of client services which are
marketed under one name but delivered independently or through a cooperative
effort.
Partnering can also give you the resources to handle a large one-time project
without increasing your own overhead or actually hiring employees. Another
advantage of partnering is that it is a way for a homebased business to grow
substantially without having to move to a commercial location.
Tips
for Effective Partnering
-
Choose partners carefully. Be sure they have the skills and abilities you need,
and share your level of commitment.
-
Define the scope of partnership. Are you working on an equal basis, or will one
of you function as the managing partner? What roles will each partner play? How
will the compensation be calculated and distributed?
- Put
it in writing. A detailed, well-crafted partnership agreement will prevent
misunderstandings, memory lapses and future conflicts.
-
Develop and stick to an operations plan. How will the work actually happen? How
and when will the partners interact?
- Plan
for the unexpected. How will you handle problems and resolve conflicts? If a
partner wants to dissolve the agreement, who ends up with what?
- Set a
minimum "no exit" time period. New ventures take time to become productive. Make
a mutual commitment to stick with the partnership long enough to give it a
chance to prove itself.
Jacquelyn Lynn is the editor of Flashpoints newsletter. Flashpoints is a
comprehensive information resource for business owners and managers who want to
take their operation to the Flashpoint. Visit
http://www.theflashpoints.com
to sign up for a free subscription to
Flashpoints newsletter plus an extra free gift: The Mindset of High Achievers by
JK Harris and Jacquelyn Lynn.
In
addition, Jacquelyn Lynn is the author of more than 20 books, including
Entrepreneur's Almanac; Online Shopper's Survival Guide; Make Big Profits on
eBay (with Charlene Davis); In Search of the Five-Cent Nickel (with Don Abbott);
and 11 titles in Entrepreneur Media's StartUp Guide series. Visit
http://www.jacquelynlynn.com
for more details.
Article Source:
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