Partnering with big businesses may initially intimidate small business owners, but the potential rewards of such collaborations can be invaluable to a company’s growth.
In this installment of CO— Strategy Studio, “Doing Business with Big Businesses,” an expert panel discussed how small business owners can build successful working relationships with big businesses.
- CO— Editor-in-Chief Jeanette Mulvey interviewed Katy Luxem, Founder and CEO of Big Dill Pickleball Co., and Rob Simopoulos, Co-founder of Defendify.
- Luxem discussed strategies for identifying potential business opportunities with large corporations, as well as tips for successfully navigating those partnerships.
- Simopoulos shared best practices for building and maintaining long-term partnerships with large organizations as well as developing a small business cybersecurity strategy.
Learn the basics and find your product-market fit
Luxem, who got her start at Amazon e-commerce in 2007, said small business owners need to identify their specific differentiation points and have a strong sense of their brand for a successful partnership with a large business.
“What sets you apart from the other … 100,000 businesses doing the same thing in [your] same niche?” Luxem said. “Have you done the research to ensure that there is a gap you can fill and a product-market fit?”
When approaching a relationship with a big business, small businesses should “cover the basics” before jumping into partnering with a large firm, Luxem noted. This includes having a deep understanding of incorporation, licensing, and regulatory and tax information, as well as coming to the table with consistent branding.
“There are a lot of hurdles with bureaucracy and compliance … [when] working with those large companies, so you don't want to waste time and resources if you start with a half-baked idea or product,” Luxem explained.
If you’re intimidated by working with larger businesses, Luxem advised reframing the way you think about your partnership.
“Decide to take that plunge and then go and make that account [or] find whatever information you need,” she said. “You are this larger business or partner's customer, too, and this can kind of help you reframe how you think about working with them.”
What sets you apart from the other … 100,000 businesses doing the same thing in [your] same niche? Have you done the research to ensure that there is a gap you can fill and a product-market fit?
Katy Luxem, Founder and CEO, Big Dill Pickleball Co.
Understand the time and resource investment involved
Partnering with a bigger company requires an investment of time and resources on a small business’s end. Luxem said the biggest factor in deciding whether the partnership is worthwhile is your bottom line. In other words, she asked, “Can you be profitable while working with this partnership long term?”
The costs associated with partnership reach beyond the cost of goods: Owners must also account for those additional resources that are needed to handle the partnership. For Amazon specifically, Luxem suggested creating a seller account before listing anything to get a sense of the overall resource commitment.
“Amazon has very detailed, up-to-date articles on everything for seller vendor platforms,” Luxem explained. “You can use their calculators and know exactly what it will cost to store a product of your size and weight [and] what regulatory requirements or restrictions your product category has.”
Beyond the logistical basics of working with a bigger business, you may also find you need to invest in resources to keep your operations running smoothly during the partnership.
“Try to manage what you're best at and [outsource] those things that you really can't DIY,” said Luxem, who suggested sites like Fiverr and Upwork to find help for issues like website blips and Shopify API connections.
[Read More: 5 Decision-Making Techniques That Will Help You Run a Better Business]
Take a multi-faceted approach to cybersecurity
Cybersecurity must be a priority for small businesses that want to build big business partnerships, and it requires a multi-layered approach. Simopoulos said he and his team have seen small businesses getting caught off guard by the requirements that large organizations have in place around cybersecurity.
Cybersecurity best practices today can involve testing your infrastructure’s strength, training employees on both cybersecurity basics and intellectual property protection, and setting up alarm systems for your IT system, said Simopoulos.
For small business owners who want to beef up their cybersecurity to entice big business partnerships, Simopoulos suggested hiring a cybersecurity company or professional to assess your current cyber posture. Then, invest in insurance to protect your business.
“Get a cyber insurance policy in place that will help you if an incident occurs and there's possible liability involved to help protect your organization,” Simopoulos advised.
[Read More: How to Protect Your Business From Being Hacked]
Simopoulos encouraged business owners to have confidence in their planning. By obtaining an accurate view of their cyber posture, listening to expert recommendations, and budgeting for both cybersecurity updates and insurance policies, small businesses can feel prepared when partnering with big businesses, he said.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.