| Have you ever heard of the expression "There is no I | | | | offer amazing cross selling opportunities. Imagine the |
| in TEAM"? The old laurel still holds true in today's | | | | potential of a show room that features the latest |
| challenging economic climate because there is no I in | | | | modern furniture designs and sound and lighting |
| SUCCESS either. There are innumerable ways to | | | | systems: The one-stop shopping potential is through |
| measure a company's success; sales volume, | | | | the roof. |
| profitability, client retention and geographic expansion; | | | | 2) Economies of Scale- Buying in bulk makes a |
| to name a few. All of these benchmarks are difficult to | | | | difference. Economics of scale means "the more you |
| accomplish during an economic boom, but even more | | | | buy, the more you save" this is why people love |
| challenging during today's contractionary economic | | | | stores like Sam's Club and Costco, and why Wal-Mart |
| climate, which is why forming industry partnerships with | | | | can offer their products at a slightly lower cost than |
| other companies will serve you well in achieving your | | | | the competition. Wal-Mart buys in bulk from their |
| company's goals and will allow your company to thrive, | | | | suppliers and can realize a few extra percent in |
| or at the very least survive, during a time of economic | | | | expense savings. You can partner up with companies |
| displacement. | | | | and purchase goods together and realize the same |
| Now come the questions; who, what, where, how and | | | | kind of savings. You can do this with food, beverages, |
| why. | | | | office supplies or advertising space. The possibilities |
| Who: An industry partner is an individual that provides | | | | are endless. |
| goods or services to a similar client base. An industry | | | | 3) Capacity Management- An industry partner may be |
| partner may also be someone who can efficiently | | | | a great resource for production capacity management. |
| manage a cumbersome part of your business | | | | Imagine you have a factory with several production |
| operation which will allow you to focus more on your | | | | lines that operate at a fixed cost regardless of |
| more profitable core business | | | | production volume. Your job as the factory owner is to |
| What: Ultimately, an industry partner is someone who | | | | operate at 100% capacity to fully recoup your fixed |
| has the ability and willingness to help your business | | | | costs. You can form a partnership with a growing |
| grow. You should not pick a competitor to be your | | | | company that has a strong sales force and distribution |
| industry partner even if the partnership may yield short | | | | network but whose production facilities are not |
| term revenue growth or expense savings. In this case | | | | adequate to meet their expansion needs. By taking on |
| you are both competing for the same slice of the pie | | | | the additional production you ensure that your factory |
| and such partnerships may result in long term problems | | | | operates at capacity while gaining access to additional |
| for your business. | | | | sales and distribution channels. This is a win-win as far |
| Where: Do not look for industry partners on social | | | | as I see it. |
| networking web sites. I can guarantee that such unions | | | | 4) Profit From Your Core Competency- Companies |
| will lead to absolute disaster. Industry trade shows and | | | | are typically good at providing a variety of goods or |
| conferences are a great place to meet potential | | | | services, but great at only a few. The main reason |
| industry partners. You can talk to a variety of | | | | that companies carry an entire suite of products and |
| professionals, view various products and figure who | | | | services is to make sure that customers can have the |
| will make a beneficial industry partner. | | | | one-stop-shopping experience and not take their |
| How: Forming industry partnerships is an art, not a | | | | business elsewhere. You can achieve the same |
| science. First, you should be upfront and honest about | | | | diverse range product offerings by partnering up with |
| your goals and objectives because it will help you form | | | | industry peers that will take on some of your less |
| long lasting partnerships. Second, you have to make | | | | profitable, more cumbersome products so that you |
| sure that the relationship is mutually beneficial because | | | | can focus on what you do best and make more |
| a discontent partner is worse than no partner at all. | | | | money at it. Remember, given that your resources |
| Third, get everything in writing, comprehensive | | | | (investment capital, office space and employees) are |
| contracts are very important in establishing a baseline | | | | finite it's always best to allocate these resources to |
| for a cooperative relationship and will serve as a | | | | more profitable use. |
| reference for conflict resolution. In addition, a contract | | | | 5) Source of Referral- As you may know, word of |
| has a positive psychological effect on the parties | | | | mouth is the most effective advertising that your |
| involved because it formalizes the business relationship | | | | company may have. Industry partners serve as the |
| and induces progress. | | | | best referral service that money can buy. As your |
| Why: There are many reasons to establish industry | | | | relationship grows stronger, an industry partner will |
| partnerships, here are the my top-5 | | | | always serve as a source of recommendations and |
| 1) Serving Customer's Needs: The best industry | | | | client referral. You know that you're the best at what |
| partner is someone who provides a complimentary | | | | you do, but sometimes customers need confirmation |
| goods or services. Examples of such complementary | | | | of that. |
| goods are nightclub furniture and sound and lighting | | | | Navigating the market place is a difficult task for any |
| equipment. Customers who are building bars, nightclubs, | | | | company from the multi-billion dollar conglomerate to |
| restaurants and lounges need both stylish modern | | | | the small town ice cream shop owner. Having a solid |
| furniture and high quality sound systems in order to | | | | reliable industry partner can help you navigate the |
| create an amazing environment for their guests. These | | | | tough market terrain while growing revenues and |
| two products do not compete with each other and | | | | cutting expenses. |