Entrepreneurs cannot achieve success alone.
They need the help and support of a whole host of people who are directly involved in the business, including employees, partners, family members and investors.
Entrepreneurs also need to develop key “partnerships” with people and organizations that are not a direct part of the daily operation. These partners work closely with an entrepreneur in some way that is important or possibly even critical for the operation of the business. Even though they are not as directly involved day-to-day as employees and customers, the support of these key partners can be at least as important for a business’s success.
Let’s look at an example of key partnerships for a simple business model. My students all know that I have one more business start-up in me. I plan to open a bait shop when I retire from teaching. Why a bait shop? My first significant small business experience was running the bait shop for the marina that our family owned in Wisconsin when I was fifteen years old. So it seems appropriate to me that my last business venture should also be a bait shop!
An entrepreneur can use key partners to help reduce risk by sharing that risk with partners. In Dr. C’s Bait Shop, I will seek out suppliers who will help reduce the risk associated with my inventory. Minnows and worms are perishable, so I will work with suppliers that are willing to deliver inventory often and only deliver it when I need it. That reduces the risk that my inventory will go bad if I have a stormy week that would lead to a significant drop in sales.
Dr. C’s Bait Shop will need a space to operate in a good location. I will try to find a landlord who will rent me the right building and offer good service at a fair price even though my business is new. I may even be able to get the landlord to pay to fix up the space I need and add that cost into my rent. So, key partners can help entrepreneurs secure needed resources without actually spending their precious start-up cash to acquire them.
I will seek out counsel from people with more experience in the industry to help serve as advisors. I will talk with bait shop owners in other markets and connect with old timers in the Tennessee fishing community.
Finally, I will build legitimacy for my bait shop among angling enthusiasts by volunteering in local hunting and fishing organizations.
Good networking with key partners is much more than just introducing myself and giving them a business card. I need to earn their support by making the relationships between us mutually beneficial.
So as simple as my bait shop business is to operate, its success depends on building a network of key partnerships. While being an entrepreneur means you do not work for anyone, it does not mean you don’t work with anyone.