Examples of Alliances

We have provided examples of some of the more basic small-business alliances in an effort to explain the concept and spark your imagination. We would be happy to discuss our larger and more complex arrangements personally.

  1. Frederick, who lives in Houston, Texas, teamed up with John, who lives in Holland, by communicating over the Internet. Together, they worked out a plan to help a New York City tour operator increase his tour business. All work is being done on the World Wide Web, and all conversations and "meetings" accomplished by e-mail.

  2. Joan owns a successful independent doughnut shop. She bases her advertising entirely on trade. She gives boxes of her high-quality doughnuts to select radio stations for daily giveaways. In return, they speak highly of her doughnuts on the air. It's not unusual to hear a morning DJ go on and on about how wonderful her product is. She has increased her morning sales by 60% as a result. The cost? A few boxes of doughnuts that might be thrown away anyway.

  3. A veterinarian, Elizabeth, wrote a personal note to all her clients advising them that Companion Pet store was having a sale with super discounts on all items. John, the pet store owner, agreed that Elizabeth could offer her clients a further discount when they presented one of Elizabeth's business cards. In return, John placed one of the veterinarian's brochures in every bag at the checkout counter, along with a letter of endorsement. Both businesses improved considerably.

  4. Theo owned his own trading card and comic shop. He catered mostly to school-aged children, and like so many small businesses, inventory was a problem in the beginning. But Theo was a serious collector of sports memorabilia, himself, and decided to joint venture with some of his collector friends.

    In exchange for funding, he offered them a share of the profits from buying and selling baseball and other trading cards they had financed. Theo bought cards in case lots with money from the investors and sold the cards in his comic and card shop, then shared the profits when they were all sold.

  5. Delores owned Flowers and More, and counted a number of businesses among her regular customers - funeral homes, wedding organizers, and so on. As these businesses had grown, so Flowers and More grew. Now, Delores needed a second cold-storage unit to handle the extra demand. Her bank would not agree to finance it, even though the extra equipment would increase sales and boost profitability. What was she to do?

    She offered her larger customers a 15% discount if they would give her advance purchase orders for the floral arrangements they were going to buy from her anyway. They agreed. She took the advance orders to a finance company that helped her purchase the cold-storage cabinet she needed.

  6. Jean loved animals. She wanted to start a pet-care service. When pet owners went on vacation, many did not like to leave their animals in a regular kennel, so this business woman offered to visit her customers' homes several times a day to feed the cat, walk the dog and so on. She thought this would be a business that did not require any up-front expenditure.

    She soon found out that people were reluctant to let a stranger have access to their home and possessions while they were away. So Jean approached an established kennel with an alliance proposal. She would offer the service under their name, pay them a commission for every pet cared for, in return for the kennel putting up the money for a surety bond to protect the customers.

    The kennel agreed. They were able to expand their business by providing a service to customers they would probably have lost anyway, and this enterprising lady got started in her own business with no financial outlay. She later expanded her business to 14 employees and hundreds of customers.

  7. Brian owns a book store. The weatherman at a local TV station wrote a book of local weather statistics. Brian called the manager of the TV station and offered to do a co-operative promotion with the station.

    They placed the weatherman's book in Brian's store, even had the weatherman do in-store appearances, which resulted in promoting the store's locations for the appearances, in addition to promoting the radio station and the book.

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  8. A used car dealer, Sam, obtained his inventory of used cars from auctions. He made his purchases with money from private investors (whom he found among his regular customers). These investors were promised a share of the profits from selling the cars to the public.

    This was a wonderful joint venture deal for everyone - the dealer had his inventory financed at no interest; the investors had their investments fully secured by the cars; and they were also able to double their money in a very short time with relatively little risk.

  9. Denise, a Realtor, has her own real estate program on local talk radio. She has arranged for sponsors (title companies, mortgage providers and others) to pay the fees charged by the radio station.

    Denise might have provided her time for free, to gain the exposure, and let the station sell advertising time. For the Realtor with less ambition, appearing regularly as a real estate expert on someone else's show can be just as effective.

  10. Don, an enterprising baked goods manufacturer, had grown his company by securing good, solid business supplying supermarkets with fresh-baked breads and cakes, and had recently landed a contract with a chain of bakery outlets. He needed new equipment to supply this increased demand.

    Don was buying approximately $15,000 to $16,000 worth of flour every month--nearly $200,000 per year. He approached his favorite supplier with a joint venture proposition. He would sign a contract to purchase $800,000 worth of flour over four years if the supplier would provide the $40,000 needed for the new equipment.

    The supplier agreed. The deal gave the baker free equipment, amounting to a 5% discount on his flour purchases - $40,000 / $800,000 = 5% - and the flour supplier landed a locked-in, long-term customer. Both were very happy. (Actually, the supplier didn't put up $40,000 cash. He used his good credit to purchase equipment for Don and made monthly payments for it, out of the money Don paid him for the flour!)

  11. A pharmacist had a very large customer list and always sent out Holiday cards to her list every year. A local jeweler offered great prices, but was having difficulty establishing their new business.

    The pharmacist mailed to her list in December, as usual, but instead of sending out the same old holiday card, she offered her customers a "special gift" to thank them for their patronage.

    The pharmacist told the customers on her list that if they brought that letter to the jeweler, that they would receive 20% off of any item in the jewelry store. The jeweler would not lose any money since their markup is so high. Furthermore, he would receive new customers who would likely buy from him again and even recommend new customers.

    The letter from the pharmacist not only offered the discount as a gift, but recommended (endorsed) the jeweler by explaining a little about the jewelry business and how the pharmacist saved a bunch of money on her own purchases there.

    They made $75,000 dollars in two weeks. The pharmacist got half the profits and more than a few "thank-you's" from her customers.

These are just a few examples of some of the simpler alliances. Contact us to see what me might be able to arrange for you.

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