Howdy Partner! Harness the Power of Strategic Partnerships for New Revenue Growth

When two commercial enterprises enter into a relationship that will hopefully be profitable for both parties, it is called a strategic partnership. This relationship is usually made formal through the creation of legal contracts but many micro-businesses simply enter these types of relationships with a hand-shake agreement. A strategic partnership is not a legal partnership – it does not affect or change the corporate filings. But small and micro-businesses should seriously consider making these more formal as legal issues crop up and can cause major unforeseen damages. Either way, consider strategic partnerships to be an indispensable, trust-based relationship that needs to be cultivated.

Smaller businesses will enter into these types of agreements to improve the value, offer more or complimentary services and raise overall profitability. The companies involved will each hold one or more business assets (including expertise) that will help the other by enhancing business for both entities. Other partnerships can provide expanded markets for one or both of the companies, a wider array of services or guidance through experience with certain business opportunities, or an opportunity to outsource work to achieve benefits and new levels of innovation – all based on the mutually desired outcome for shared increased revenue. 

Restaurants, caterers, and hotels have been in these types of relationships for decades. Entertainment companies, DJs, bands, florists, and event planners will often look to set up these arrangements to help them reach more prospects and be of service to the entity for their own events and special occasions. Strategic partnerships can provide long-term revenue growth as well as different points of view, creating more products, services, or levels of service for each company involved – making both companies stronger and more viable. These partnerships are not restricted to the hospitality industry – every small business can create their own strategies to determine what they need to complement their business and the strengths and expertise that they can offer to a prospective partner. 

 Keep in mind that these are mutually agreed upon arrangements and can present problems as well. Guidelines for the management of inventions, composing of intellectual property, exclusivity, coverage areas, hiring of employees or partners (and non-compete agreements), and how the partnership will terminate must be laid out from the beginning. It is important to remember that strategic partnerships are prone to conflict and must be reassessed on a less frequent basis than the contractual agreement states. This will put you in a better position to negotiate or terminate the partnership if important KPIs are not met.

Jane Parmel is a Business Coach focusing on efficient operations and profitability for small businesses. She is an experienced entrepreneur, working in the Event Management & Logistics industries for over 25 years. She is a Speaker whose presentations focus on resilience and authenticity for business as well as non-profit audiences. As a writer and International Best Selling Author, her work has appeared in Brainz Magazine, on the blog AVividImagination.com and in the collaborative book “Voices of the 21st Century: Resilient Women Who Rise & Make a Difference”. Jane also provides resources and a platform for women’s voices through her Phenomenal Message Makers Network.