By Sharita Humphrey –
Yes, the business world can be very competitive and harsh. But it doesn’t have to stop you from thriving. While competition is unavoidable, there are also endless opportunities to collaborate with other businesses in order to diversify your audience, reach new customers, and improve your products or services.
First things first: What does it mean to collaborate with another small business?
Collaboration is a great tool for businesses, regardless of their industry or size. Typically, it refers to organizations working together to solve problems and achieve goals that seem to be out of reach when working alone.
By combining the expertise, perspectives and skills of different people and organizations, all parties involved are better able to innovate and grow.
The key benefits of business collaboration can fall under specific categories:
• Physical Capital. Share resources, equipment, facilities, or raw materials.
• Human Capital. Increase employment, develop employees’ skills and knowledge, encourage staff motivation, etc.
• Intellectual Capital. Tap into combined knowledge, capabilities, skills or expertise.
• Financial Benefits. Cut costs by sharing resources, bid for larger contracts, etc.
1. Achieve Mutual Growth. Collaboration helps small businesses compete with larger brands by combining knowledge, consumer reach and technology. Both small businesses will thrive as a result of their combined efforts to help one another. It might be difficult for tiny companies to establish themselves if they are up against businesses with larger financial resources and employee power. But through collaboration, they can achieve mutual growth. Both companies will benefit from teamwork.
2. Expand Your Network. Small businesses collaborate through linking professional circles. They can develop a broader network than each business could on its own. Plus, successful entrepreneurs have a common interest in meeting new people, building their contacts, and expanding their network. Being successful in business requires you to constantly make new connections, form alliances and reach new audiences.
3. Save Time. As a business owner, you already know how precious a resource time is. By collaborating with another small business, you’ll definitely save time. How? You’ll have more hands on deck – whether you spend that time problem-solving, manufacturing new products or marketing. The more people working on a project, the more time you’ll save.
4. Fuel Innovation. Collaboration can trigger innovation because everyone brings a unique set of skills, knowledge, approaches, experiences and ideas to the table. Working together and embracing these differences can give way to new ideas through the combination of unique perspectives. Collaboration itself is key to constant innovation. The saying, “innovate or die,” isn’t overdramatic – if you don’t innovate in today’s highly competitive marketplace, your business won’t be sustainable.
5. Expand Service/Product Portfolio. Rapid technological advancement gives a shorter life-cycle to products while racking up astronomical R&D costs. However, through collaboration, businesses can bring their resources together to cut costs and mutually benefit from innovation. For instance, cars equipped with in-vehicle tech like Apple’s CarPlay and Google’s Android Auto help both industries grow together.
6. Share Knowledge. One of the biggest benefits of collaboration is the opportunity to learn and share knowledge. In fact, every interaction you have with someone outside of your own immediate circle can teach you something valuable. Some of the most fruitful business collaborations include two or more professionals who bring different perspectives, skill sets and knowledge to the table.
Collaboration allows you to take advantage of the skills and expertise of others – and share your own. Working collaboratively means that everyone involved can capitalize on the resources, knowledge, ideas and skills of others. Having a broader understanding of other areas and business practices can feed into your own decision-making processes and day-to-day business activities.
7. Solve Business Problems. There’s a reason why crowdsourcing is so popular – there is power in numbers. If one person is unable to complete a task on their own, then two, three, or more people may be able to find a solution to the problem. Try to recall a recent challenge you encountered in your business. Did you reach out to a mentor, a partner, or some other trusted resource to get some guidance? This is the same as in business collaboration – when you collaborate with another small business, you have more people working on problems.
Remember, the more difficult the problem is to solve, the more we can gain from having someone from outside to help us. Adding a new perspective results in the outcome going beyond what you expected to achieve.
8. Save Money. In collaborative relationships, expenses are shared. You can double, triple, or even quadruple your budget! You can do this while cutting costs if you work with another company. Part of the agreement includes sharing development and marketing expenses.
The Final Takeaway
The above mentioned points are just some of the many benefits of collaborating with another small business. Through collaboration, you can achieve mutual growth, expand your networks, save time, fuel innovation, solve business problems, save money, and more!
About the Author: Sharita M. Humphrey is an award-winning finance expert, money mentor and Certified Financial Education Instructor. Once broke and homeless, Sharita completely transformed her life and is now a successful entrepreneur and one of the most in-demand money coaches for individuals and business owners of color. In 2020, Sharita was named National Financial Educator of the Year.