Article provided by Telkom
How small businesses can use strategic collaborations to enhance their business offering.
Seven years ago, Uber and Spotify teamed up to create a car music partnership that allows users to connect to their Spotify accounts and stream their music during their Uber rides. Locally, Pick ‘n Pay partnered with BP so that drivers can have access to a convenience store to buy food and refreshments while filling up during their journey.
These are just two of some of the most successful strategic partnerships that have created convenience for customers and value for the businesses involved. The whole point of strategic collaboration is working together towards a common goal that will be mutually beneficial for all parties involved. A strategic partnership involves two or more independent bodies that work together to achieve a certain objective and execute a particular plan.
While many large corporations have successfully created partnerships, this is a space where small and medium businesses can also thrive. SMMEs are a crucial part of the economy as they employ more than half of the labour force in South Africa and through strategic partnerships, SMMEs can grow which subsequently benefits the overall domestic economy. Supporting SMMEs through partnerships is crucial for their development, for example, Telkom Business through its online marketplace Yep! and the Yep! All-In-One solutions provides a platform for small businesses to digitally transform.
Why should small and medium businesses consider strategic partnerships?
As a small business owner, you are constantly finding ways to grow your business. A strategic partnership is one of the ways that small business owners can expand their business and increase revenue without incurring drastic costs or necessarily increasing staff.
When forming a strategic partnership, it is often highly beneficial to partner with a business that has a similar customer base as your business. For example, a local bookstore could partner with a local coffee shop so that both businesses sell each other’s products at their stores. Such partnerships allow small businesses to be able to explore different growth opportunities and compete with larger businesses that offer the same services.
Through strategic partnerships, businesses can put their resources together for mutual benefit and by doing so, the businesses can achieve goals that an individual business would struggle to attain. Partnerships allow SMMEs to create more value for their customers by using each other’s knowledge and expertise, therefore, improving the overall customer experience. The ability to share ideas and perspectives as two separate entities can have a positive effect on both businesses and create more growth. Partnering with other SMMEs that offer services and products that complement each other creates an opportunity for businesses to gain access to new markets.
Strategic partnerships can also be cost-effective as businesses can address the skills and expertise gaps within their organisations by combining resources, knowledge, and expertise from both businesses. Collaborating with other businesses creates a level of trust in your brand. When customers and potential investors see the company’s ability to successfully work with other businesses, it will make the business more reputable. Partnerships not only create revenue opportunities for the businesses involved but also increases the visibility of both businesses.
What kind of partnerships can small businesses consider?
Small and medium businesses can form different types of partnerships. Some examples include a joint venture where two organisations merge their resources. The second form of partnership is an equity strategic alliance, in which one organisation will purchase equity in the other business, or the companies will buy equity in each other’s businesses.
Many SMMEs may need to outsource certain services such as accounting services, IT management, marketing and manufacturing. Small businesses can collaborate with local service providers and in that way boost the attractiveness of their community to potential investors. Another way to create a collaboration that will be beneficial for both parties is by sharing an office or retail space, in this way, both businesses will be exposed to each other’s customer base, therefore, enhancing their reach and growing profitability.
Businesses can also create a product that will allow both businesses to showcase their knowledge and expertise. Telkom’s collaboration with MasterCard to create the Telkom Pay Digital Wallet virtual card is an example of this. Telkom teamed up with MasterCard and Ukheshe Technologies to launch a card that will allow Telkom Pay users to make payments to local and international e-commerce platforms.
Keys to a successful strategic partnership
According to McKinsely&Co’s joint ventures and alliances survey report, 47% of managers cite alignment on parent and partnership objectives as a factor that contributes to the success of a partnership.
To establish great strategic partnerships, it is important for the businesses involved to build a strong foundation by having clear objectives and values as this will allow both parties to remain on the same page. In a partnership, businesses need to establish a clear strategy and understand what both parties aim to achieve through the partnership. Creating this foundation is to ensure that the efforts of the partnership are not just one-sided and that both businesses are equally invested and are both getting value out of the partnership.
It is also more beneficial to team up with a business that does not sell the same goods and services as your business. Rather team up with companies whose products and services complement yours, in that way it does not create competition.
When two separate entities come together, communication is a key component that will help the partnership to succeed. This means that it is important for both businesses to establish good communication, common goals, and expectations. 44% of surveyed managers in the report said effective internal communication and trust were crucial factors that also contributed to the success of partnerships. If the businesses establish good communication, they can overcome the challenges that they may encounter in the partnership.
Partnering with Telkom Business
Telkom Business prides itself as the ultimate partner and proponent of the small, micro, and medium enterprise. From getting your business connected to helping your business increase visibility or access productivity solutions, Telkom Business has product offerings that speak to the unique needs of all SMMEs.
Keeping your business connected
In the age of the digital economy, businesses need to have access to reliable and fast connectivity. Telkom Business helps SMMEs to get connected through affordable fibre and DSL packages. Through Telkom Business connectivity packages, businesses can enjoy seamless connectivity suitable for video streaming and transferring large amounts of data.
Productivity tools at your fingertips
Telkom Business supports the digital transformation journey of the SMME by providing businesses with software-as-service tools that enable productivity such as an office tools suite, and an Internet of Things (IoT) management platform. Telkom Business has partnered with multinational technology company Zoho to introduce Out-of-the-Box Software. The Out-of-the-Box Software includes integrated applications that focus on web and mobile apps for sales, marketing, accounting etc.
Increasing online visibility by partnering with Yep!
Through the Yep! online marketplace, SMMEs can easily increase their online visibility making it easier for customers to find your business online. On the Yep! online marketplace customers can book, buy and bid services from small businesses. The online platform allows users to access services, request quotes from multiple businesses and book appointments.
Claim your free website and free lead generation solution for your business from Yep! Powered by Telkom Business here.
Fin-tech tools for SMMEs
In March, Telkom Financial Services launched the Telkom Pay Mobile Point-of-Sale (Mpos ) app, a fintech tool that allows SMMEs to make and receive payments through their mobile phones. The app serves as a speed point machine in your pocket that can be used anytime and anywhere.
Telkom Mpos is a pay-as-you-use solution with a competitive rate of 2.5%. The app also includes a built-in virtual card. Businesses can transfer funds from the app to their business accounts and can replenish inventory from their suppliers using the EFT functionality integrated into the solution.
To learn more about how SMMEs can partner with Telkom Business, please visit www.telkombusiness.co.za.