For mumpreneurs and small business owners, collaborating with other individuals and businesses can be incredibly powerful.
Being able to share knowledge, experience, contacts and even expenses in some cases, can help you to appear bigger than you are, appeal to a wider target audience, attract larger clients and grow your business faster.
Not only that, the leverage that comes from having someone else to brainstorm with, bounce ideas off, keep you accountable, help with larger projects, outsource work too and generate referrals from can help you become more effective.
But as great as collaboration can be it isn’t without its pitfalls. So how do you make sure you do it right and your business gains the full benefits? Here are the six golden rules of collaboration to help you build profitable and mutually beneficial business relationships.
1. Choose your collaboration partners wisely
In order to gain the greatest benefit from collaboration, you need to partner with businesses that have a clear benefit to you, and you to them.
Ideally you want to collaborate with businesses that your client will go to either before or after you so you not only supply each other with leads, but can also value-add to clients by building in each other’s products or services to your offering, help to secure bigger clients by pitching together, and/or offer each other reciprocal services or industry experience and knowledge.
If you are in a service-based business you may also want to consider forming working relationships with people in your industry who do what you do. While it can sound strange to collaborate with your competitors, when done correctly it can be incredibly lucrative.
Not only do you gain someone who will send you referrals when they have reached their workload capacity and someone to outsource to yourself, you can also bounce ideas off each other to gain a fresh perspective helping you both grow your businesses simultaneously. Obviously care needs to be taken here, and due diligence and a written agreement are a must.
2. Remember that personality does play a big role
It is important to keep in mind that while you may be perfectly matched at a business level with a potential collaboration partner, at a personality and value level you may not be.
Whenever you are forming a working business relationship, especially when you will be working closely with them and referring your clients to them, you need to be able get along with them easily and trust them completely. If you have any doubt, get to know them better or opt not to pursue the arrangement.
3. Determine how you will work together
When you are collaborating with others it is important to determine how you will work together and what the exact arrangement will be right from the start.
For example, will you be jointly pitching to win larger contracts and be giving equal input? Will you be providing each other with reciprocal products or services or reciprocal input into each other’s business?
If you are looking to refer clients to each other, will you give them the referral for them to process under their own business name to keep everything separate or will you include their products or services on your quote so you maintain control and potentially make a profit on top? Who will own the client at the end – you, them or both of you?
These questions will help you set boundaries and articulate your expectations so you can come to a clear arrangement, saving you a lot of headaches in the long run.
4. Ensure it is win/win
Any business arrangement you enter into should always be win/win – and equally win/win at that. So establish early how you both will benefit.
For example, while you could both give reciprocal referrals, will one of you be able to provide more than the other?
If so, is there another way to compensate the one who will receive fewer referrals with added promotion, reciprocal products or services or more business support to ensure the arrangement is fair?
By creating win/win opportunities and evaluating the relationship regularly to make sure it is equally beneficial, you will build a strong working relationship and guard against potential resentment.
5. Document your arrangement
It is a wise idea to document your arrangement and sign it along with a confidentiality agreement and code of conduct so you are both protected, clear about your rights and responsibilities and remain accountable.
6. Uphold your end of the bargain and act swiftly if they don’t
The most important part of collaboration is to understand that your actions can directly impact the business and reputation of those you are collaborating with – and vice versa.
This is especially relevant when you are referring, doing joint pitches or building each other’s services into your respective businesses, because you both can be judged by association.
For this reason it is important to hold up your end of the arrangement and treat every client they refer or share with you the same way you would your own. Likewise, it is also important to make sure the person you are working with feels the same way.
If you do receive any negative feedback from your clients or find the person you are collaborating with is not keeping their end of the bargain, first give them a chance to rectify.
Though if there is a clear breach to your arrangement or if negative feedback is consistent, then by all means part ways. Just try and do it as amicably as possible to maintain your professionalism, reputation and protect yourself, especially if they have had exposure to your clients.
What are your tips for collaborating with others?