At the beginning of your business lifecycle, you’re just living day-to-day, constantly putting out fires or just able to focus on accomplishing what’s directly in front of you. But as you hire and develop a team of great employees, you can start to think and interact beyond the walls of your business. Maybe you start to meet and socialize with other business owners. Maybe these other business owners have a similar client base to your own—wouldn’t it be great to work together and join forces to market both businesses together?! Maybe, or maybe not. Working with another business, or forming a strategic partnership, to reach a similar client base can be a great business tool or a colossal headache. Does it make sense to create a strategic partnership and link your business to another? Ask yourself these 3 questions:
Will both businesses receive equal benefit from the partnership?
This is the most important question to ask yourself when looking to partner with another business. If both of your businesses won’t equally benefit from working together, then it can’t really be called a “partnership.” Now that doesn’t mean that you shouldn’t figure out a way to work together, but a true strategic partnership is mutually beneficial for both parties and not a one-sided endeavor.
Signs that you’re not entering into a strategic partnership:
- You will be spending money on an event or promotion to benefit both of your businesses, and the other business will not be sharing the expenses, or vice versa.
- You and your team do most of the labor to organize an event or promotion and the other business does not, or vice versa.
- Your business receives a disproportionate amount of leads from an event or promotion and the other business does not, or vice versa.
- You put your business at legal risk forming this partnership–if you answer “yes” to this question, no need to bother asking any other questions. No partnership should put your business at risk. It’s a no-go.
We just had a great event partnering with Village Juice, an amazing restaurant serving cold-pressed juices, smoothies, salads, and toasts. Everything served is clean—meaning no artificial ingredients. As their website says, “We believe real food doesn’t contain ingredients, it is ingredients.” Since we’re in the middle of the Pure Health Challenge (Literally half-way done!), having an outdoor class at Village Juice was a great way to get my clients together for a fun class, drink and eat some healthy, tasty food, and socialize after. Both businesses received an equal benefit from this partnership—Lonnie, the owner of Village Juice, was assured a packed house on Sunday morning after class and we had a great event venue and a chance to refuel with clean food which will promote better post-workout results. Both businesses also got a chance to show potential new clients what we’re all about. A partnership at its best!
Unfortunately, not every partnership is as well-paired as ours with Village Juice. One time, the studio was asked to have an off-site class at another popular local business. We spent a lot of money to rent equipment and market the event. We also closed our studio to encourage people to attend what was billed as a special and unique off-site class. We taught the class—doing most of the labor. Unfortunately, the other business didn’t do any marketing to their own clients (even though they had agreed to) and the only people who showed up were invited because we had told them about the event. So, we closed the studio, invited all the people in attendance, did all the work, and the other business had a huge sales night. We unfortunately, got very little benefit from the experience, other than knowing that we’ll never schedule another event like that again. Does this mean that I wouldn’t work with this business again? No! I’d be happy to go back and teach a class at any future event they’d like to schedule—for a fee. If they wanted to host a class in the future, I would require a fee to teach the class and they would be responsible for all of the marketing to build attendance. Why did this experience lead to a failed partnership? Perhaps it’s because we really aren’t trying to reach the same client base.
Are both businesses really trying to reach the same client base?
To get the most from a strategic partnership, you’ll want to determine if your potential partner is really trying to reach the same client base as you are. So, go ahead and ask them: “Who is your ideal client? I just want to a make sure we’re going to be putting our efforts towards the same goal.” If your potential partner is actually trying to reach a new demographic by working with you, perhaps you would be better-served to forgo this pairing. Why? See above. If you end up spending more money and more time to get less than the other business, then you don’t have a great fit for a strategic partnership. This leads us to the importance of setting expectations for any future partnerships.
Do both businesses have the same expectation about the goals of partnership?
The best strategic partnerships occur when both parties take their time to establish the primary goals and direction of the partnership. I am really excited about a new partnership that Pure Barre Winston-Salem and Pure Barre Clemmons has formed with Fleet Feet Sports of Winston-Salem. During the month of November, Pure Barre will be part of Fleet Feet’s Living Fit Series and have 4, 45-minute classes at Fleet Feet on Monday’s at 6:00 PM. Pure Barre is a great cross-train for running and we recently created a package specifically for runners or those who like to cross-train—Flex Barre, which is 4 classes a month for $69. This package is great for anyone who is running or doing other cross-training, but still wants to add Pure Barre for a low-impact strength training exercise.
Before we both agreed to this series of events, I met with Stacie, Director of Training Programs at Fleet Feet, to discuss how working together could directly benefit both businesses and what our goals and expectations of the events were. Stacie was interested in providing a great cross-train for their running community during the colder “off-season.” Although, is there any off-season for runners?!
Since we now have our Flex Barre package, I was interested in reaching out to introduce Pure Barre to more people in the running community. Most importantly, both Pure Barre and Fleet Feet are constantly seeking to offer their clients a quality experience. Our main goal at each business is to build a great brand that is synonymous with quality and excellence. I can’t wait to update you on how this partnership goes. I think it will be really fun and exciting! Who knows, maybe those runners will inspire me to do a little cross-train—or at least get some new shoes.
Hopefully you’ve noticed that each of these 3 questions build off of one another. You really need to ask all 3 to get to the answer of whether a potential strategic partnership is a good fit for you and your business. Don’t be afraid to ask direct questions. If you ask a question and the answer is a little shaky or vague, think about that and whether it’s a sign that the proposed partnership is not necessarily going to benefit your existing clients or allow you to gain access to new clients.
Partnerships can be a great business tool, but if they don’t work out, you might feel taken advantage of or angry that your expectations weren’t met. I’ve partnered with other businesses with great success and unfortunately had some less stellar outcomes. Sometimes it’s important to take the risk and see what happens, but a little preparation and definition of what each potential partner is seeking can go a long way to serving the needs of both businesses.
I’ve been able to travel more recently—which has been great! But I’m finding that I need to get back to having great accessories to make travel easier—like a cross-body bag. I’ve been looking at some options and I’ll give you my top picks on Friday. Hopefully I can make a final decision by then!
Until then, stay on your toes!