“Alright, stop, collaborate and listen, TNP is back with a brand new invention…” True, we have too many syllables to make that last bit work, but good old one hit wonder, Vanilla Ice, was on to something! Even for small businesses, collaboration is key, and at the heart of any great mind meld is a strong relationship. Whether you just want to open up to a different sector of your potential market, or an influx of referrals is stirring the pot, working with your fellow business owners can broaden your reach in incredible ways. Like all things in business, there are varying levels and stages of these official relationships so we’re here with a crash course on partnerships that will pump up your volume.
Joint Ventures: Most joint ventures involve the creation of an entirely new company to service a particular market or create a new product. However, even among small businesses, joint ventures can do a lot! The nitty gritty—joint ventures (or JVs) are partnerships between two or more companies with a specific purpose in mind. In our application, most JVs will pertain to limited time, cross-promotion. The limits and possibilities are nearly endless! Since many JVs involve a level of contractual cooperation (as any pooling of resources should), your stipulations can outline a narrow integration or something more comprehensive. In the end, it’s dependent upon the purpose behind your team.
Strategic Alliances: Like a square and a rectangle, all JVs are strategic alliances, while all strategic alliances are not JVs. Essentially, these partnerships include the cooperation of multiple parties to achieve a set of objectives. But, unlike JVs, the parties generally retain a heightened level of independence. While you are still pooling resources, it may not necessitate the same level of contractual obligation since there is an inherent limitation as to how enmeshed each entity is in the venture.
Co-Marketing: By far the easiest and least restrictive way to partner with another business is through co-marketing. These can be as low-intensity as dropping off promotional coupons at a complimentary institution, or as complex as a more integrative marketing special. Of course, these are also on a far more limited time scale, often lasting a few weeks or so before the offer or coupon expires.
So what’s the real difference between each of these collaborative forms? Let’s use the example of a music retailer and a concert hall. A JV would entail the two creating a ticketing company to sell and distribute tickets for regional shows. For a strategic alliance, perhaps the latest concert tickets for the hall would only be available at the retailer’s brick and mortar location. And, last but not least, a co-marketing plan could involve special discounts for clients attending concerts at the hall should they bring in their ticket stubs to the retailer in the days following the show (just in case Ice comes back around for another tour!).
Are you looking to permanently penetrate a new market? Perhaps you want to team up for a special promotion. Or maybe the goal is a more comprehensive service package for your clientele. The beauty of these partnerships is that they can be as short term or long term as you desire. By no means are they just strategies for beginners and it’s advisable to enter into multiple JVs, strategic alliances, and co-marketing ventures throughout the life of your business as each opportunity arises. Whichever is right for you, these partnerships offer fantastic breakthroughs to rapidly expand your audience and keep your business “Too Cold, Ice Ice Baby. . .”