Often entrepreneurs are so intently focused on finding ways to build their business or raising capital that they overlook one of the key avenues to address both needs. Partnering is one of most important vehicles available to an entrepreneur, especially in the early stages of the business, where you can leverage scarce resources to either generate revenue or conserve expenses, or both. It can potentially provide valued visibility in the marketplace both with the strategic partners as well as with potential future customers. Yet few entrepreneurs capitalize on the many opportunities that exist for them to partner.
Strategic partnerships can fulfill a number of functions for the small business owner. They can provide expanded sales coverage with the partner selling the entrepreneur company's product or service into markets where there is significant potential and applicability but where the entrepreneur has no presence (and the partner does).
Or, a partner can provide needed development resources to enable the entrepreneur company to complete a new product, in return for exclusive use of that product in the partner's target (and non-competitive) market space. Here the entrepreneur wins twice. Gets development resources they didn't have and exposure (and potential new revenue) in markets they never expected.
Finally, a partner can provide add-on product for entrepreneur to expand its offerings into its existing market, providing additional opportunities for revenue without expending additional resources for development.
But where do you find partners?
They come in all shapes and sizes. They could be larger companies that are operating in the same (but non-competitive) market space that the entrepreneur company is. Or they could be another small company that has strengths where you have weaknesses. For example, they are strong in development or engineering and you are stronger in manufacturing or sales. In essence, seek complement, to your needs and requirements, whether that be market penetration or expansion or to your product mix.
Early on in your company's life, look for ways to expand sales distribution or product development. Seek opportunities to get more for less, thereby, reducing capital requirements and preserving cash. Later in the company's development, look to partnering for chances to get enter new markets or expand your product line, providing market expansion without expansion capital. And finally, a good strategic partner can, eventually, become an even better strategic buyer, potentially providing you an optimum exit opportunity.
What are you waiting for? Go find a partner. Your success could depend on it!
Master Yoda knows these things. His job it is. May success be with you!