11 Things to Know When Partnering With a Larger Company for the First Time
Many B2B entrepreneurs dream of landing a huge contract with an enterprise-level business. The large budget and resources of a bigger company often means steady work, along with opportunities to learn and improve skills.
However, these business partnerships are quite different than working with a fellow entrepreneur or small business. You need to be prepared to follow established procedures, adapt to their tools and procedures, and possibly even go a through lengthy approvals process to move forward.
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At the same time, taking the leap from being a solo-entrepreneur or running a small business — to working with a much larger one and expanding your own horizons, this can be quite the emotional and stressful time for any entrepreneur to make such a big move.
To find out what entrepreneurs should know before they start reaching out, we asked a panel of Young Entrepreneur Council members the following question:
The first time your small business strikes a partnership with a larger company can be a heady experience. What is one crucial thing entrepreneurs should know before they take the leap?
Here’s what they said:
1. Underpromise and Over Deliver
Landing a large company is an exciting time for any small business. However, it’s important to give yourself room to exceed their expectations. Only promise what you can deliver and then give them a little extra that they didn’t expect to create loyalty.
2. Hire an Attorney to Help With Due Diligence
One of the biggest mistakes that I see entrepreneurs make when partnering with a large company is not being prepared. Many times, entrepreneurs don’t research potential issues and legal problems, which often leads to a failed project. The best way to prevent any of these from happening is to conduct the proper due diligence. Hire an experienced attorney.
3. Include an Exit Plan
When partnering with a larger company, you need to ensure that your company is protected. The larger company isn’t looking out for your best interest, so if the deal goes bad you need a clause in your contract that allows you to exit the partnership. Placing a time limit on the partnership is a perfect way to do this. It allows you to test the partnership and renegotiate after a set time period.
4. Ask About the Level of Customization Required
Large companies have the tendency to want everything customized to their needs without having to pay the bills. This can get pretty expensive, so you want to focus on bringing in companies that are not going to ask much of you. If they do, make sure you are ready to show them the bill, because it is not easy to get the team to customize features for a large company.
5. Look at the Bigger Picture
Whether you’re making a sale, building a channel relationship or developing any other kind of partnership, engaging with a large brand will take a lot of time and serve as a major “distraction.” As a small business, you should only take on those costs (time, mostly) if there are other partners who might follow. Make sure you can leverage this experience even if the deal falls through.
– Aaron Schwartz, Passport
6. Trust Your Instincts
Starting a business partnership can be a big opportunity but also a big risk. Trust your instincts. Do you believe the other company or business contact is fundamentally trustworthy and honest? Will they take the responsibility of being connected to your brand seriously? Traffic or revenue numbers are only part of the story when it comes to assessing mutual partnership fit.
7. Be Prepared for the Deal to Fall Through
“Birds fly. Fishes swim. Deals fall through.” One of the biggest shockers for small businesses is when a larger partner either ends up providing next to no value or falls through on a deal. It’s one of the harsh realities of doing business, so it’s important to be prepared for it. “This partner would be fine without my business and I need this more than they do” is the right mentality.
– Adegoke Olubusi, Helium Health
8. Establish Clear Expectations
Make sure your expectations will be met and are outlined in the contract. The larger the organization, the more detailed the contract will need to be. Also typically larger organizations will pay on a more delayed schedule, so get funds up-front for projects and services. Don’t fall into a trap of waiting on funds.
9. Be Flexible
When working for a large established company, as the smaller, greener business you might be expected to adopt some of their systems. For instance, you might have to adopt their style guides for writing and formatting documents, and you might be asked to used specific software that they use. Be prepared and be flexible.
10. Remain Transparent and Focused
Just because you strike a partnership with a larger company doesn’t mean you get to slack off. The money that rolls in will be nice, but you can’t use it as an excuse to ignore your upbringing and mission. Partnering with a larger company has tons of obvious benefits, but customers see it as a sellout. Remain transparent as much as possible and stay focused to ensure your effort stays the same.
11. Stay True to Your Business Goals
Entering a partnership with a bigger business seems like a triumph, but it can be bad for your company. Your businesses may end up devoting all its resources to serving the larger partner, customizing products to meet their needs and neglecting smaller customers. Go too far down that road and you end up in thrall to one customer, with no options. Remember your goals and don’t be afraid to say no.
Grow Your Business, By Focusing on Your Personal Brand
When it comes to growing any type of business or brand online, it’s all about the work and effort put into it. Paid advertising is always going to work well, but you will need to track and manage your ROI and ad campaigns. Social media also works great, but it’s tougher to convert audiences into paid leads and sales. Blogging is also another working method, but this one takes time and patience.
This is especially true if you are the face of the brand. Through the power of social media, it’s extremely easy and effective to not only reach new audiences but to also rank higher in Google for personal names and brand names in the process. Be sure to try out this method, along with each of the recommended tips above for growing your brand or online business in 2019.
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