How strategic partnerships with SMEs can benefit your business

Posted on November 6th, 2014
Business Skills & Planning

One of the effective, but overlooked ways SMEs can grow their business networks and clientele is by forming strategic and mutually beneficial partnerships with other businesses in their industries.
This form of partnership works best when each businesses has a product or service that will help the other, but that each respective business does not have internally. By pooling their marketing and networking resources, and working together on projects, each company is able to benefit .
We spoke to two SMEs that have formed such a partnership. Both operate in the occupational health and safety industry. They share the story behind their alliance, and the impact it has had on their businesses.
Safe partnerships
M-TECH Training Consultants is a Pretoria-based industrial mobile equipment and safety training service provider. The company conducts safety assessments, tests and safety training courses on construction and mining sites.
“We are all about safety in the workplace,” said administrator Christa van der Walt.
The company’s limitation is that it does not supply or sell safety equipment to clients.
Look nearer for partner
To fill in the gap, M-TECH is working together with Sebenza Safety, an emerging supplier of personal protective equipment also based in Pretoria. Sebenza (Work, for IsiZulu) supplies worker protection clothing and safety wear to industrial clients in construction sites and mining companies, from head to foot gear.
“I’ve been working on the safety gear industry for over 10 years and I decided to start my own supplier company,” said executive director, Samkelo Malangeni.
How to partner
After finding themselves working on same construction and mining sites, the two companies decided to explore ways in which the ventures could work together and become allies.
“Our businesses are not in a direct competition but we always found ourselves with similar clients and almost always at the same time,”said Malangeni. “We would always find ourselves getting business after M-TECH has done the training on sites. So we sat down and drafted a contract that was satisfactory to both Sebenza and M-TECH.”
“What we do now is print our business cards back-to-back with information of the two companies. We even advertise and recommend each other to clients,” van der Walt said. “You can think of the business as a single entity with a holistic product offering. But in actual fact, we are two separate businesses.”
Here are five tips from Christa van der Walt and Samkelo Malangeni on how to develop and maintain successful business partnerships
1. It’s important for business partners to have clear partnership agreements drafted by attorneys.
2. Business partners should consistently set their expectations clearly with each other.
3. When evaluating a potential business partnership, also think about the clients and what type of partnership would benefit them.
4. Partnerships should be mutually beneficial, meaning both sides need to gain something from the relationship for it to be worthwhile.
5. Don’t stay in a business partnership if it’s no longer viable. It’s better to end the partnership and regroup than to force something that’s not working.