Partnerships can come in many different shapes and sizes and all take plenty of time to build and sustain. Yet once nurtured and effectively implemented, they can be immensely beneficial.
Here are just five examples of partnerships start-ups can pursue.
1. Create business opportunities for others
Grow your business by allowing others to make money from distributing and selling your products. In Africa, Coca-Cola has managed to reach customers in rural areas by empowering local entrepreneurs. Across the continent the company has thousands of micro-distribution centres that are independently-owned and run by locals. These entrepreneurs employ people to take Coca-Cola’s products into far-flung communities, which would have been difficult to reach with delivery trucks. Coca-Cola provides financing and training to these entrepreneurs, and also supplies them with pushcarts to make distribution easier in areas with poor roads.
“It doesn’t make sense to want to try and keep all of the gains for yourself. You have a much more viable business system when you have partners along the value chain who have a vested interest in the long-term survival of your business because they derive a living from your business system. That is the ultimate formula for sustainability on the continent.” – Bill Egbe, Group Director, Sustainability, Strategy & Planning at The Coca-Cola Company (Eurasia & Africa Group)
2. Reach more customers through cross-promotion
Cross-promotion is when customers of one product or service are targeted with promotion of a related product. A good example of cross-promotion is African low-cost airline Fastjet’s partnership with online hotel booking company Venere.com. Through this alliance, Fastjet customers are able to purchase rooms at Venere.com’s complete inventory of hotels via the airline’s online booking platform.
3. Enter new markets by offering your expertise to established businesses
Expanding your business into a new country can be expensive and time-consuming. But rather than attempting to build a client base from scratch, offer your services to existing businesses, who can then in turn supply these as part of their offering to their clientèle.
For example, Nick Durrant, of digital production company Bluegrass Digital, says many digital agencies in the continent lack the specialist skills to provide the level of service that their clients expect. If you therefore have a Kenya-based app development company, you can offer your services to agencies in other African countries that might not have this expertise. Internet technologies make it possible to do the work remotely. You can therefore have a thriving business in another country, without even having to open a physical office.
“The key to success in Africa lies in collaboration. Finding a trusted partner on the ground that understands the market not only reduces the hassle of having to negotiate the various cultural idiosyncrasies of an unexplored territory, but also exposes businesses to a number of varied and sometimes unexpected opportunities.” – Nick Durrant, Managing Director at Bluegrass Digital
4. Save money through barter partnerships
Not all partnerships need to involve the exchange of money. Think of ways you can provide your services to another company in exchange for theirs. An owner of a magazine or a high-traffic web platform can offer free advertising to a hotel in return for complimentary accommodation (hotels are rarely fully-booked), which means significant savings on his next business trip. Barter partnerships work especially well with services firms that have spare capacity. For example, a recruitment agency start-up can ask a web development company to build its website, in exchange for helping them find the right candidate next time they need to hire a developer.
5. Leverage another company’s retail infrastructure
You can quickly grow your footprint by partnering with businesses that already have existing retail infrastructure in place. For example, logistics company DHL has managed to significantly boost its number of service points in Africa by partnering with local business owners who act as DHL resellers. Thousands of businesses – including travel agents, pharmacies, supermarkets, laundries and photo studios – now allow their customers to send DHL shipments alongside their normal offerings.
All partners are provided with a complete branding kit and go through a training programme to ensure compliance with DHL’s requirements and procedures. These small businesses benefit from commission on all DHL sales, an increase in foot traffic as well as being associated with a global brand. DHL, on the other hand, gains from a cost-effective expansion strategy.