Question: How do you know if it's a good idea to go into business with a partner?
Los Angeles, California
Answer: Whether you set up a formal business partnership or simply partner for marketing purposes, there are at least four great reasons not to go it alone.
1. Expand your business. Add a partner who provides a similar service to your own (such as when two accountants team up) and effectively double the size of your firm. You can pool your prospect lists for marketing efforts and double your expertise to pitch and win larger accounts. Your joint marketing budget will go farther, too.
2. Add new services. Team with a business that offers complementary services, and you open up a whole universe of new prospects for your growing company. For example, a creative copywriter might team with a graphic designer to create a full-service design firm. By providing a turnkey solution, you add value and increase the desirability of your company's services.
3. Reduce your marketing costs. Form a marketing partnership with a group of businesses that offer complementary services to the same target audience to create brochures and other materials. For example, a lighting designer might form a strategic partnership with a kitchen appliance and furnishings showroom and a home-remodeling contractor. Together they could produce a color brochure and continuously looped video to run in the showroom showcasing the talents of all three companies.
4. Take on new markets. Want to expand geographically? Form an alliance with a business like yours in another city. This can be a formal business partnership in which ownership is established or simply a marketing alliance that allows you to promote your firm as one with offices in several cities. You'll get instant big business marketing clout without the overhead.
No matter what form of partnership you choose, it's best to take it slow. Get to know your potential partners, and be certain all lines of communication are open. Discuss any concerns and all possible impediments as well as benefits, and put the parameters of your relationship in writing so everyone clearly understands what's expected of them.