How to form a local business alliance

As a small business owner, you may  feel overwhelmed at the prospect of competing with  larger companies. Even if you have a unique product or service, you may find yourself coming up against companies much larger than yours. These established firms, with their economies of scale and established market penetration, can be intimidating. So what’s a small business  owner to do?

You don’t have to be a big company in order to take advantage of the benefits of size. By aligning yourself with other small businesses with similar goals, you can get more exposure for your business than you can on your own. Here are some steps for starting an alliance of local businesses.

Find other like-minded small businesses

Start  by identifying other businesses that target customers similar to yours. In your alliance, you want to have businesses that complement each other but don’t compete with each other. Many alliances limit their membership to just one business in each industry. You don’t want to end up with an alliance composed of seven financial planners and two house painters. Partner with other reputable small business owners who are reliable and adhere to standard business practices. 

Pro tip: A good indicator of a responsible small business owner is whether they carry business liability insurance, which protects them in the case of a lawsuit. Look for partners who have general liability insurance, professional liability insurance, or both.

Look for variety in small business partners

Besides searching for businesses in a variety of sectors, look for businesses that are well established, i as well as start-ups. The business owners who are just getting started can learn a lot from those who’ve been in business for a while, and the established entrepreneurs may be energized by the folks who are just starting out. Include sole proprietors as well as businesses that have some – or  many – employees.

Utilize resources to find small business partners

Just as you want to learn from others who have started businesses before you, you can learn from those who have already started their own alliances. American Independent Business Alliance (AMIBA) helps small businesses start local alliances and can put you in touch with  businesses in your area that may be looking to join forces.

Establish objectives

Your business alliance can accomplish a lot of things, so it’s important to focus on a few specific goals to begin with. If your alliance consists of local businesses serving the  community,  consider advertising as a group or sponsoring a local event. Try hosting a ‘shop local’ event once a month or coordinating a presence on Small Business Saturday. If your alliance is focused on B2B enterprises, consider a way to share leads and referrals. Some alliances have a system for making referrals to member businesses and may  require members to provide a certain number of leads to other members. 

Involving local government in your business alliance from the start is a smart move. It makes good business sense to know your local elected officials, and it’s likely that, at some point, an issue will arise that your alliance wants to take a stand on. Knowing who to talk to and how to make yourself heard will go a long way toward getting your point across.

Share knowledge and experience

One of the biggest challenges of starting and running a business is how much there is to learn. By aligning yourself with other local businesses, you can benefit from the wisdom of their experiences so you don’t have to reinvent the wheel. If there are certain topics that everyone in the group is concerned about,  assign different topics to members to research and report back to the group. You might have one person who researches business insurance, for example, while someone else learns about local bylaws.

Pair up

An alliance that includes multiple businesses may spawn other alliances where two or more companies can engage in a joint venture or co-marketing effort. If there is synergy among a subset of the larger alliance, take advantage of that and work together. For example, a travel agent could refer a pet sitter to clients who are going on vacation. The pet sitter could email an offer from the travel agent to their  list of clients.

Do well by doing good

A local business alliance can help the community as it helps its member businesses. By supporting local charities and organizations, members of your alliance can make themselves known in the community. Sponsoring a youth athletic team, walking or running in support of a local charity, or organizing a town-wide clean-up day are all ways to show your support for the community where you do business. 

Consumers are beginning to realize the benefits of doing business with local companies. They’re aware that a local businesses put more money back into the  economy, so supporting these businesses improves the quality of life for everyone in town. 

By forming an alliance with other local businesses, and letting consumers know about it, you’re giving them the opportunity to make the choice to support local merchants and boost the economy