Building Partnerships: How Small Businesses Can Collaborate for Growth

As a small business owner, expanding your reach and driving growth are likely top priorities, especially in a competitive business landscape. However, finding new, creative ways to achieve these objectives could seem daunting, especially if you are working with a limited budget. That’s where business-to-business collaborations can come into play.

You probably already know several small business owners in your community, and there are likely more to meet. Not only is there a network around you where you can share similar experiences, feelings, and responsibilities that come with ownership roles, but there’s also potential to develop partnerships. Collaboration can be a powerful tool for getting exposure to new audiences and accelerating your business growth while strengthening your presence in your community.

Whether you are interested in launching a partnership or are considering revamping your strategy, we’ve broken down the key elements of what this process can look like and some ideas you can try for your small business.

First, find complimentary businesses

To develop an effective partnership, you want collaborations to “make sense.” If you try one that leaves potential customers questioning why your business collaborated with another, it probably won’t leave the lasting impression you want or help build your brand presence.

Consider small businesses in complementary industries to yours and start narrowing down your list. Before jumping into the partnership with each business, it is essential to do your due diligence—what is their mission, message, and values, and do they align with yours? It should be a good fit for both of you on a product/service level as well as a brand personality level.

Before searching, you can start by determining your customers’ needs—creating customer personas can be a great first step. By understanding what is important to your target audience, you can then start to determine where they may already shop. With this information in hand, you can see what items/services would benefit their lifestyle and go from there. For example, if you’re a food retailer that sells cheese, it might make sense to partner with a local wine merchant, while a wedding photographer could consider teaming up with a florist. The partnership should make sense for each business and offer something beneficial for customers, adding to the products/services they already purchase.

Establish your partnership goals

Now that you’ve developed a list of complementary businesses, you can consider what you want to achieve with them. Why are you looking for partnerships in the first place? Is it to expand your customer base? Create a referral network? Increase your brand presence in your city? Establishing a clear understanding and setting general goals early on can help you formulate a strategy to narrow in on these goals, which you can take to the business(es) you want to partner with.

Now it’s time to reach out and pitch your idea

After selecting the businesses you want to proceed with, it’s time to make your pitch. What would you expect if another business approached you for a collaboration? Identify the elements that are important to you as a small business owner and develop your pitch from there.

While it should be a collaborative process, hence the term business collaboration, it is still a good idea to go into the pitch with an idea of what the partnership will look like. If you’ve already determined the business you want to partner with but have the actual partnership aspect open-ended, it may appear as unfinished and unstable. Presenting suggestions can allow you and the other small business owner to communicate the plan going forward and tweak certain aspects to create a true partnership.

Personalizing your pitch for each business is also important. Rather than sticking with one elevator pitch idea, dive deep into each small business and showcase why this partnership idea will be mutually beneficial in a way specific to their brand identity.

Finalizing the partnership

Once the ball starts rolling and plans begin to take shape, drafting a legal document outlining the partnership can be a smart move, especially if inventory or other vital resources are involved. While trust is essential to a business collaboration, a legal document can provide added assurance and confidence in the partnership, ensuring that everything will go according to plan.

Of course, every partnership will differ depending on the businesses involved. However, setting key performance indicators (KPIs) before the launch can help guide the collaboration and determine whether it yields positive results. You can derive these KPIs from the initial set of goals you established earlier in the process. This could be customer growth, number of post shares, new followers, etc.

Monitor the collaboration

Many small business owners are already familiar with the ability to swiftly adapt if something is not working, especially if it means potentially wasting money. Therefore, while partnering with another business may seem beneficial, be sure the numbers reflect that. Clear communication with the other small business owner is key to assessing what is working and what needs to change. If the partnership doesn’t hit your KPIs, it could be time to pivot the idea to a better fit.

Examples of partnership opportunities

Paired promotions:

Who doesn’t love a good deal? Finding ways to connect each business together in the partnership is key, and a paired promo can be an effective way to do so. Customers who shop with you can get a discount at the other business and vice versa. You could create a small flyer for the other business to display with a promo code or content outlining the promotion, and you would do the same for the duration of the partnership.

For example, if you own a dog treat company, a promotion with a vet office or dog daycare for a certain percentage off for new customers could be a good fit and help expand your customer base.

Product displays:

Maximizing your product’s exposure is always a plus. By showcasing your products in other small businesses, you can tap into a customer base you may not have reached otherwise. For instance, if you own a coffee roastery business with your own beans, collaborating with local bakeries could be a strategic move. You could structure the partnership so the bakery owner receives a percentage of the sales generated from displaying your products, which can boost sales and help hook customers into continuing to purchase your product. If you run a strictly e-commerce-based business, product displays could be a great way to reach a different audience segment while attracting your customers to the bakery, for example, if they can’t purchase online.

Create a service package:

Partnerships could seem a bit more difficult if you run a service-based small business, especially if you don’t have tangible products or a brick-and-mortar shop. Regardless, a business partnership can still be effective.

For instance, if you run a photography business, you could look for small party planning companies to combine services with and create a bundled package deal. This could not only be convenient for customers planning their event, but it can also create a path for additional revenue and increased work. Similarly, you could recommend the party planning company to your customers—it’s a win-win.

Product development:

Launching a new item may sound like a massive step in a collaboration, but depending on the business you partner with, it could be a perfect fit. For example, if you own a jewelry business, you could collaborate with a local charm business to develop a product that combines both.

If you determine that your target audience already engages with another business, teaming up on a new product can help add value for existing customers and entice customers from one business to consider purchasing from the other. By leveraging each other’s strengths and customer base, you can create a product that appeals to both of your target audiences.

Social media takeover:

We can all recognize the power of social media. As a small business owner, your social platforms may already be your lifeline to reach and engage with current and prospective customers. If you’re looking for a way to ease into a brand partnership, creating a couple of videos that a small business can share to their Instagram Story, for example, can be a great way to reach the audience they’ve built. Plus, with link and location sticker options, you can create engaging, interactive posts prompting users to visit your page and/or website.

Determining the type of posts you create (and the posts the other small business owner will create) will require adequate planning and communication to make sure the content appeals to users. You could tour your business, highlight products, or meet with the other small business owner and make a video together. You could also use this strategy to supplement another partnership idea to help get the word out to both sets of customers.

Small Business Solutions with The UPS Store

As you plan your next partnership, head over to The UPS Store at a location near you for Small Business Solutions that can optimize your day-to-day operations. From printing to shipping and more, our team members can help you achieve your small business goals.