Building Local Partnerships to Drive Your Small Business

In the world of small business, if you view the broader community as merely being the location of your physical operations, you’re missing powerful opportunities for collaborative partnerships that can bolster innovation, drive sales and help increase brand recognition while fostering loyalty.

Building small business partnerships within your community can help you achieve just that, whether through co-marketing or cross-promotion of your products or services, creating mutually beneficial referral partnerships or joining forces for in-person events and workshops.

Continue reading to gain strategic insights into the multifaceted benefits of local business affiliations, what types of partnerships to consider and how to start mutually beneficial relationships with other small business leaders in your area.

Collaboration for Small Business Success
As a small business owner, you’re used to wearing many hats — from CEO to marketer, accountant and more — while operating with limited resources under thin margins. However, by working with other entrepreneurs in your area, you can pool your resources, expand your reach, lower your risk and stand out from the competition, all while positioning your brand as an involved member of the local business community.

Inspired by insights from the Pomona Chamber of Commerce, serves the business community of Pomona, California, building relationships with other small businesses in your community can help you and your partners grow together by:

• Increasing brand exposure – Every brand has its loyal customer base; when you partner with another brand — that hopefully overlaps with your target audience — you have a golden opportunity to make a positive impression. Leveraging the trust that already exists in your partner brand for your product or service can help you net business and foster trust more quickly than going it alone.
• Sharing resources and skills – Marketing campaigns can be expensive, between the cost of printed materials, sponsored social media posts and other promotional efforts. Because the majority of small businesses already operate on tight budgets, pooling resources with your fellow local entrepreneurs can help reduce operating costs while supporting your overall business needs. Additionally, involved businesses can pool their different talents and tools, such as graphic design, social media marketing, webpage development and others, instead of hiring for these skills.
• Strengthening community relationships – When small business owners feel they can only rely on themselves, they become isolated and disconnected from the broader business community. This, in turn, can result in stagnation and missed opportunities. By building relationships, you are better informed, better positioned to take advantage of evolving situations and a better member of your community. For aficionados of “shop small, support local” initiatives, seeing mutualistic support between businesses can help them feel engaged in the betterment of their home and more likely to explore your offerings.
• Fostering opportunities for innovation – When we’re supporting our business needs as sole entrepreneurs, it can be easy to fall into the same patterns time and time again. Collaboration, however, injects much-needed creativity into businesses of any type by bringing together diverse perspectives that challenge preconceived notions while revealing new angles. Brainstorming in a group not only helps share the cognitive load that can weigh down tired entrepreneurs but is also a great practice for developing new concepts.

Community Partnerships to Explore
Depending on the type of business you run and its unique needs, there are a variety of mutually beneficial community partnerships you and your fellow entrepreneurs can explore; all you need is a little creativity and a desire for teamwork. Take a look at some of the proven strategies below to help you find the best option for your needs and seize the benefits of local collaboration:

• Gain complementary partners to increase sales – Certain businesses seem to go hand-in-hand for shoppers, whether it’s stopping for a refreshing beverage or treat on their way to a bookstore or practicing self-care by seeking out a massage after an intense workout. By partnering with another local business with which you share similar customers, you can improve their overall experience and spend at your businesses by offering cross-promotional discounts, special opportunities and deals they wouldn’t receive otherwise.
• Share space to offset costs – Commercial rent can be costly, eating into small business owners’ already thin margins. If your place of business has extra space, consider offsetting this significant cost by renting it out to another local business. Whether it’s a shelf, tabletop display or a spare room you aren’t fully utilizing, this partnership can not only lower your costs but help your business make inroads with new audiences while helping to uplift your fellow entrepreneurs who might not otherwise be able to afford a brick-and-mortar location. Some examples of this include a hair salon partnering with a handmade soap business or a dog groomer offering their outdoor green space for obedience classes.
• Ease supply chain pains through collaboration – No matter your type of business, there are products you rely on in the distribution of your goods and services. If you run a coffee shop, that could be your top-rated coffee selection and baked goods, all the way down to the to-go cups and bags used to package orders. By partnering with other retailers with similar needs, you can negotiate better terms with suppliers or share costs on wholesale goods.
• Stand out and remain competitive against larger chains – Creating a marketing alliance with other small businesses, such as by running group ads or buying local campaigns, can help you leverage the name recognition and brand loyalty of all your partners while lowering your ad spend. These partnerships allow members to compete against larger entities while helping individual businesses involved maintain their identities and customer relationships.

How to Build Local Partnerships
Now that you understand the multifaceted benefits of creating partnerships within your local business community, let’s cover some best practices to help you get started:

• Attend local business events – Across the country, chambers of commerce help support the unique needs of small businesses by increasing their visibility through their websites, social media channels and other marketing efforts, as well as supporting essential advocacy efforts and providing discounts to the goods and services on which many entrepreneurs rely. But they can also help you find and build local partnerships through networking events and their vast array of business contacts.
• Pitch your partnership as a mutually beneficial relationship – If a fellow business owner is unsure of how exactly they’ll benefit from a potential partnership with you, it’s unlikely they will take a chance on a relationship with your business. Instead, ensure prospective partners know what benefits they’ll receive from the very beginning. Come prepared with information regarding your audience — including its demographics — social media following and reach, as well as how your partnership can help them address common pain points, like overhead costs, supply chain issues and brand awareness, among other items.
• Start small and scale as needed – While a prospective business relationship can be exciting, it’s important not to commit too much at once. In community partnerships, starting small reduces financial or operational risk and helps build trust gradually, rather than putting a brand-new relationship under significant pressure from the outset. This will also help you see if your businesses truly complement each other, you mutually collaborate comfortably and your prospective audiences mix well. If the relationship doesn’t pan out, it will be easier to discontinue compared to a major investment.
• Make sure your partnership is clear – Like any other business activity, once you find your partner, you need a contract or agreed-upon set of rules to ensure all expectations are clearly spelled out. This guide should cover the particulars of your partnership, such as the total length of your agreement, any payments needed — especially if you’re renting out space — referral requirements and any discounts offered, as well as who is responsible for what and how you’ll report and track outcomes. Taking the time to ensure that all parties understand the terms of the agreement is essential to protecting your reputation and ensuring the relationship goes smoothly.

When you run your own small business, you don’t have to go it alone. Responding to challenges by fostering business partnerships with one or multiple members of your community is a powerful, cost-effective way to promote unity, share resources, boost brand visibility and enhance the satisfaction of all participant audiences or even customers you haven’t reached yet.

The American Independent Business Coalition (AIBC) helps our members by enhancing three key areas of their lives — their careers, personal lives and general health — through unique member benefits. To explore the business benefits available through your AIBC membership, visit aibcoalition.com.

Articles in this newsletter are meant to be informative, enlightening and helpful to you. While all information contained herein is meant to be completely factual, it is always subject to change. Benefits may not be available in all membership levels. For more information, or to upgrade your membership, please call 800.387.9027.