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Strategic partnerships can be a game changer for your small business

Google, Facebook, Pfizer, Sony – it can be hard to compete with the giants in any industry. They have instant brand recognition, seemingly bottomless resources, and a wide breadth of expertise and experience. But while most startups view their larger counterparts as competition, smart entrepreneurs look at the Goliaths to identify opportunities to work together.

As a small business, one thing you can do to rapidly grow your brand is to seek out strategic partnerships with like-minded larger businesses – particularly those that share commonalities and target markets, but which are not direct competitors.

Forming partnerships enables a smaller company to take advantage of an existing consumer base, as well as valuable resources and marketing channels that have already been put in place. For the larger company, it can position them as an early adopter, provide value-added for their customers and even prove to be a testing ground for a potential acquisition down the line. Whether you want to boost sales, increase brand awareness or go after a new market, here are a few ways that creative partnerships can give you the edge you need over other competing small businesses.

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Find bigger brands that share a target audience and provide a win-win offer: Successful partnerships are all about identifying which companies are also targeting your ideal customer and finding a way to provide value back to the partner.

I previously ran business development and partnerships at Canadian startup Rent frock Repeat, which rents out designer dresses to women attending special events. While I knew we needed to reach a large audience in order to hit our goals, we needed to target the right kind of people – women needing a beautiful designer gown who were interested in low-cost ethical consumption.

I identified charity galas as the perfect partner, and systematically approached every charity gala and non-profit foundation in the country and proposed a mutually beneficial partnership: if they agreed to promote our brand and services to their attendees, we would donate an agreed-upon percentage of any direct sales back into their fundraising initiative. It was a win-win situation and, with time, these partnerships accounted for a large amount of our revenue.

We also formed a partnership with Delta Hotels to target guests going out for the evening – in exchange for promoting the dress rentals on all of their in-room TVs, as well as through their concierge, we provided a customized door-to-door dress-rental service for all of their guests, which was a huge value-add on both sides.

Look to other startup companies for partnerships, not just Fortune 500 brands: Effective strategic partnerships don't always have to be between a small company and a big brand – lots of startups team up with each other for great gain.

An example is the partnership between Spotify and Uber. The music-sharing service and ride-hailing company teamed up to provide combined personalized services. Uber customers can listen to their own playlists during their ride or choose what they want to listen to from Spotify's streaming catalogue.

On Spotify's part, the partnership clearly set them apart from other leading audio-sharing industry giants, such as Apple Music, while also incentivizing existing consumers to upgrade their Spotify accounts. For Uber, the manoeuvre gave the tech company meaningful leverage over their competitors as the deal was exclusive to Uber vehicles.

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Use partnerships to promote services, not just products: This can also work for service businesses. In my current role leading business development at a marketing agency, I've formed partnerships with other businesses that offer complementary services. This works because it gives us additional capabilities for our clients, while also providing a source of referrals from partners.

One very successful partnership was with a local Facebook advertising agency. Our clients are often looking for Facebook ads to complement our PR campaigns, so the partnership allows us to send companies to pros who we know will deliver results and be good to work with. On their end, they don't provide PR or design services, so they often pull us in to help augment their existing ad campaigns. We've formed about a dozen partnerships of this kind, and they continue to be one of the most consistent sources of leads for the company.

Build the foundation for a long-lasting partnership: It's hard to think back to a time when there wasn't a Starbucks on every street corner, but the company wasn't always the household name it is today. One of the ways the coffee company became an industry giant was leveraging effective strategic partnerships.

One example is their partnership with the bookstore chain Barnes & Noble, which saw Starbucks open locations inside Barnes & Noble locations, giving readers and shoppers a reason to hang out in the store – and giving Starbucks an avenue into an established retailer. Subsequently, Starbucks struck a deal with Chapters in Canada in 1995. Starbucks can still be found at Chapters locations across Canada, and it's proved successful for both brands – when you find a partnership that works, aim to build a long-term partnership deal.

As you build the partnership roster for your small business, try to find solutions that benefit both parties. Remember: your long-term success is contingent on finding win-win solutions.

Finding the right partners and reaching the right agreement may take time and iteration, but it's well worth it and may be the edge that allows you to grow. As long as you're upfront about any limitations when striking a deal, you have nothing to lose and everything to gain by seeking out and securing strategic partnerships for your small business.

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Fatima Zaidi is vice-president of business development at Eighty-Eight, a creative communications agency based in Toronto. She was named one of Marketing Magazine's 30 Under 30 in 2016, and she writes for publications including BetaKit and the Huffington Post.

Video: At age 22 and 23, these sisters have both founded their own startups
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