As a start-up owner, you’re constantly looking for new ways to scale your business, which is a real challenge. You need to increase your market visibility and establish credibility, which can be hard to do. If no one has heard of you or if others haven’t used your goods or services, it can be nearly impossible to establish visibility or credibility.
Of course, there are many options out there for business owners. In this article, we’re looking at partnering with larger, more well-established companies. When you partner with a larger company, you get their implicit seal of approval, and that can almost instantly improve your company’s market standing. It can also open up new sales opportunities, which is always welcome.
Like most options, this one is not without its risks. You can be bullied by the larger company into doing more for them than you want to, or they may offer you little more than the right to put their logo on your marketing materials. You might lose some flexibility or the ability to make independent choices. But most of these risks can be mitigated if you go into the partnership negotiations fully aware of the risks and benefits.
Below, we offer eight critical tips for any small business owner thinking of partnering with a larger company. If you follow these tips, you should find yourself in a beneficial partnership, rather than one that drags your company down.
What to look for in a partner?
1. Make sure they line up with your company.
The businesses you target for partnerships should be in a field related to yours, but you don’t want to share corporate secrets with a competitor – especially since you can be sure that they won’t share their secrets with you. So make sure the company you approach is well respected, is in a field related to yours, is not in direct competition with your company and targets a similar market. That way, you can ensure you get the most out of the relationship, without sacrificing too many secrets.
2. Think about what you need, and find someone who has it.
Many larger corporations have things that you could really use. For example, if you need financial investment to make the partnership worthwhile for both parties, make sure your potential partner can stump up the cash.
At the same time, though, don’t think of the partnership in purely financial terms or in terms of what you need. You’ll get more out of the partnership than simple cash injections or advice, so try to look beyond your immediate needs to find the right partner.
How to build a relationship with the bigger company?
3. Build bridges with individuals first.
Partnerships are relationships, and all relationships are personal. So if you haven’t already, you need to find a person within the company who can be a real, powerful advocate for the partnership. Find that person, and really get to know them.
Use the relationship to do a little digging, too. When you’re hanging out at a conference or chatting over an informal lunch meeting, ask that person what the company’s attitude towards partnerships is. Find out what they’re willing to give to a partnership, and find out what they would be looking for. Then use that knowledge to convince the higher-ups in the company.
4. Emphasise what you can bring to their company.
As mentioned above, this partnership is a two-way street. That means you’ll need to bring something to the party, too, and you should know what that is. Maybe your partner could use your start-up enthusiasm or your innovative approaches to traditional markets. Perhaps you have a cool bit of technology that the larger company’s customers would appreciate.
Whatever it is you can bring to the larger company, have that at the forefront of your mind when you meet to discuss potential partnership arrangements. After all, they know what they can give you. They just don’t know – yet – what you can give them.
5. Get your paperwork in order, and expect them to have theirs.
This might seem a bit strange, as it’s not really directly about building relationships, but it is critical. If you’re going to enter into a contract-based partnership, your potential partner is going to want to do some due diligence. If you’ve already got your business plan and financial records ready for inspection, that will make you look prepared and trustworthy.
And remember to do your own due diligence. If the potential partner company is reticent about showing you their records to prove they’re worthy of your trust, that should set off alarm bells.
Once you’ve got an interested company
6. Maintain control where you can.
You can’t force other companies to change, but you can build in to the partnership certain protections against their slowness and other issues. You will be limited by what the larger partner does and how quickly they can move. You can’t change them; they’re simply too big. But you can set limits from the beginning of the partnership, giving you the ability to move and change tack as quickly as you can, whilst still getting the most out of the partnership.
7. Make the partnership as mutually beneficial as possible.
Obviously, getting that seal of approval from the big company is going to be a big boon to your start-up, but that doesn’t mean that you owe the company everything in the world. You need to make sure that they bring more than their clout to your business. Build in an obligation on their part to send over experts in different areas or whatever it is you feel like you need from them. Then make them stick to it.
At the same time, be sure that you’re not giving them more than you can. They are the more powerful party, so it will be easy for them to ask for one more thing from you. But when that one more thing turns into day-long commitments, the partnership simply isn’t working for you anymore.
8. Expect things to take a while.
Large companies are like onions: they have many layers. That means there are more barriers to communication or action than you, the owner of a nimble start-up, are probably used to. That means that every time you need to talk to a new department or get approval for a proposal, you’ll have to go through several different people. Some of them will be instantly agreeable or easy to get in touch with, but others will need some convincing or be hard to track down. Just expect any new process to take much longer than you think it should, and you’ll be fine.
Many entrepreneurs and small business owners feel that, when it comes to partnering with bigger companies, the risks outweigh the benefits. But you can bring experience, gravitas and brand recognition to your company by partnering with well-known players, which can open up new sales channels and opportunities.
If you do choose to partner with a larger company, go in with your eyes open, with a view to making it a completely mutual relationship. That way, they can benefit from your company’s flexibility, while your company can benefit from their expertise. That really can be the best of both worlds for both companies, which is what every great partnership should offer.