Business Networks and Alliances

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It is critical for smaller businesses, in particular home-based businesses, to form business alliances to succeed.  Strategic alliances involve building relationships with businesses and adding value to the objectives and goals of the businesses in the relationship.

Alliances can take a number of forms; the relationships you foster with other businesses may be formal or informal.  You may wish to consider the following types of alliances and evaluate which alliances are suitable for your needs.

Sharing Information:  These tend to be informal arrangements where different business owners meet to exchange ideas, experiences and information on relevant business issues.  These alliances are beneficial in keeping businesses up-to-date and aware of common business issues.  Industry associations offer important avenues for such alliances.

Sharing Resources:  As a home business owner you may find it beneficial to share the costs of large business expenses by sharing resources with other businesses.  For instance, share the use of expensive equipment or combine resources to conduct combined market research or collaborate upon purchasing supplies.  This kind of alliance requires closer collaboration and works best when all businesses have the same objective. Take note that joint decision making is often required ensuring that all businesses equally benefit.

One-Off Joint Projects:  Joint projects allow businesses to collaborate on specific projects or contracts over a defined period of time.  This alliance allows business to take on larger projects or provide a wider range of products or services.  Co-operation between the businesses is essential during the project.  You may want to consider drafting formal legal documents that dictate the operation of the project to avoid conflicts.

Long-Term Partnerships:  You may choose to collaborate with other businesses and develop long-term relationships on business initiatives such as joint marketing partnerships or supplier-purchaser partnerships.  In this situation a close relationship is developed and the business strategies of all partners need to be strongly integrated.

There are many benefits to forming business alliances, including:

• your ability to meet customer requirements by partnering with similar businesses to deliver a complete service;  this will in turn increase your customer base and potential revenue;
• your capacity to take on larger jobs by partnering with similar businesses in joint projects;
• your market by partnering with similar businesses to provide a wider range of products and services;
• expenditure by sharing resources with other businesses, such as sharing transportation/logistics expenses or sharing marketing initiatives;
• expenditure by purchasing supplies in bulk with other businesses;
• your knowledge of the market and/or industry by sharing information with other businesses.

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The success of any alliance depends on selecting the most appropriate business partners.  To ensure a successful alliance consider the following points:

• Define the opportunity:  getting the foundation right for alliance formation is critical.  You need to be clear about your objectives, the benefits you want from the alliance and what benefits you can offer potential business partners, then identify potential business partners.
• Develop a list of criteria of potential business partners:  rather than attempting to juggle hundreds of relationships you should select and foster only a few effective relationships.  By developing a list of criteria of what you want from your business partners you will gain greater benefits from your alliances.  Your list of criteria should include the capabilities of potential business partners, whether there will be mutual benefits in the relationships, your business capabilities in terms of the needs of the relationships.
• Identify and approach partners:  identifying potential partners may be difficult at first.  Attending functions of networking associations, industry and professional bodies may assist you in getting to know other businesses and identifying potential business partners.
• Select partner(s):  developing business alliances is often a two-way relationship.  You need to be aware of what other businesses need when selecting business partners.  It is best that you discuss the objectives and goals of your business relationships to avoid conflict at later stages.

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• Business Advisory Services (BASI) Incorporated - Western Sydney
  BASI holds regional network breakfast meetings in Western Sydney (Blacktown) on the first Wednesday of every month from 7.00am to 8.45am.  The meeting provides participants with opportunities to network with prospective customers;  meet with competitors to ensure sound marketing positioning;  be kept up-to-date with legislative changes;  be kept up-to-date with local council and town planning developments;  and be a voice in the development of the business community.  For more information refer to the BASI website at www.basi.com.au, phone 9678 9733, email info@basi.com.au or fax 9678 9744.
• Botany Bay Home-Based Business Network
  The Botany Bay Home-Based Business Network has been established as part of the Botany Bay Business Enterprise Centre.  The Network runs regular breakfast briefings, dinners, golf days and Street Smart Skills Development workshops.  The website is www.homebasedbiz.com.au.  There are articles and newsletters which may be downloaded freely from time to time.
• Blue Mountains BIZNET
  BIZNET Blue Mountains is a regional chamber of commerce for the Blue Mountains, Lithgow and Oberon regions.  A non-profit organisation, BIZNET aims to support existing and proposed businesses in the Blue Mountains and Lithgow areas by facilitating networking and providing information, advice and services.  BIZNET also provides a vehicle for representing the interests of businesses and lobbying on their behalf to relevant authorities and organisations.
  To join BIZNET, enabling participation in regular network meetings, contact BIZNET at its Katoomba office on 4782 5307 or email admin@biznetbm.com.au.
  BIZNET maintains an active website at www.biznetbluemountains.com.au and online application is a simple process.
• The Lake Macquarie Home-Based Business Association
  This Association commenced in January, 2002 and currently has 30 members.  The Association was formed to offer HBBs an opportunity to network and discuss issues pertinent to running a HBB with other HBB operators.  Future initiatives of the Association include addressing the training needs of HBBs, investigation of mentoring opportunities, looking into group buying and tendering opportunities.  For further information contact Julian Campbell on phone 0414 736 484 or email julian@innerbalance.com.au.
• Penrith Valley Home-Based Business Network
  This Network is a non-profit group that meets once a month, with a guest speaker or activity which covers a topic relevant to running a home-based or small business.  We know that home-based business operators may face special problems, such as isolation and finding relevant mentors and support people.  They may also find it difficult to access business information resources, including business planning and management advice.  The Network helps overcome these challenges by providing an environment where local businesses can support each other through utilising services, forming business alliances or providing referrals.  Everyone is welcome, so come along and meet like-minded business people who face the same business challenges on a daily basis.  For further information please log on to the website at www.homebasedbusiness.org.au.
• "Flying Solo" (www.flyingsolo.com.au) is an online resource for anyone going it alone in business.  Visit the site to view over 200 articles, download free tips and tools and sign up for their popular weekly newsletter.
• Business Swap
  Business Swap is an international network especially for professional people, business owners and the self-employed.  Its purpose is to foster the professional and personal development of its members through education, motivation and experience.  This is accomplished by regular meetings, networking and professional education group (mastermind) meetings.  Visit their website at www.businessswap.com.au.
• City of Canada Bay Council Home-Based and Micro Business Network
  The City of Canada Bay Council's Home-Based and Micro Business Network aims to help grow members' businesses through networking and skills development.  Each month the Council's Bayside Business Development Program runs network "Workshops, Peer Support and Discussion" around an issue or need shared by group members.  Meetings are free and open to any home-based business operators in the City of Canada Bay Council area.  In addition to the monthly meetings, Council runs a number of networking events.  To join the Network or for more information, please contact Stella Coe, Marketing Assistant, Economic Development on phone 9911 6524 or email stella.coe@canadabay.nsw.gov.au.
• Hawkesbury Home Based Business Network
  The home-based business community within the Hawkesbury region is diverse, dynamic and growing as more and more business owners elect to base their operations at home.  Despite the variations between industries, however, there are common issues and challenges that are unique to the home-based realm.  Issues such as taxation, business development and finance all have their own "quirks" when applied to the home-based operation.
  The Hawkesbury Home Based Business Network provides support and information to local home-based business operators in a social and relaxed environment.  Members meet monthly to discuss relevant issues, learn from guest speakers and get to know other business owners.
  New members and visitors are always welcome and a "scrumptious" light supper is provided.
  To learn more about the Hawkesbury Home Based Business Network and how it can benefit your business, contact Sandy Childs on 0415 623 622 or Lola Conolan on 4573 1380.