Small-Small Partnerships Equals Big Returns
By Nina Kaufman, Esq.From Entrepreneur.com (via MSNBC.com), comes Chris Pettila’s article on how partnering with other entrepreneurial companies can help all of you “bulk up and throw your collective weight around.”
The article discusses one company’s desire — that of Topics Entertainment — to get a bigger piece of the children’s educational DVD market. It came up with the innovative approach of taking products from smaller production houses and bundling them into box sets, which it could offer to the major retailers with which Topics already had relationships. As Pettila reports, “So far, thinking small has paid off big-time: Licensing and bundling partnerships with other small companies now constitute 80 percent of Topics’ revenue, and the company projects sales to reach $75 million this year.”
Partnering can be an important strategy for growing companies. Not only can it spread the risk of entering new markets, but also it helps entrepreneurial companies appear more stable to the end buyer. There are pros and cons to partnering ventures with other small companies, as there are (naturally) with other business relationships. Just be sure you have protected yourself in your alliance agreement so that you don’t end up training your next competitor!
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