Small business owners can’t do it alone
Whether in life or business, you need the help of others to reach your goals. For small business owners, this often means paying for the service and/or expertise of other companies.
These external business relationships can be especially valuable for smaller retailers who have little knowledge or interest in certain areas of their business. For instance, I’ve met a lot of merchants over the years who are incredibly passionate about what they’re selling and/or providing but maybe don’t have the financial training or experience to run a business.
So, how do Canadian SBOs feel about partnerships and when do they choose to make them? Here are five interesting statistics from the most recent quarterly American Express Canada Small Business Monitor:
There’s no wrong time to make a partnership. Small business owners engage in external business relationships at all different stages of their company’s growth; 38 per cent of SBOs believe external business relationships are most valuable when looking to grow or expand their business; 34 per cent think they’re most useful when trying to get a new business off the ground; and 28 per cent feel external partnerships are best for established businesses that need help entrenching their position in the marketplace.
Most business partnerships are driven by immediate needs. While 36 per cent of Canadian SBOs have ongoing partnerships, the majority (56%) seek out vendors or partners when the need arises. This idea of independence and partnering on an “as-needed” basis appears to be driven by younger businesses, as 68 per cent of SBOs with a company under five-years-old say they only make partnerships when needed.
Small businesses seek marketing/adverting expertise. Given that marketing/advertising is an area of long-standing insecurity among small enterprises, it’s not a surprise that one out of five small business owners in Canada believe that external business relationships are most valuable in these fields. As new technologies and social media sites continue to pop up, I expect SBOs to continue seeking marketing and advertising expertise.
Half of SBOs could use help with their finances. In the past year, the most common service companies that Canadian small businesses partnered with are financial services focused— 50 per cent of businesses sought help in this area, while 38 per cent and 33 per cent sought bookkeeping and legal help, respectively. As I mentioned earlier, while many SBOs are following a dream, not everyone has a business or accounting background. As these people look to grow their business, there is a clear need for assistance in cost control, payment systems, accounts receivable and payable, etc.
Partnerships are beneficial to most businesses. Almost nine out of Canadian small businesses (89%) value their relationships with their service providers and see these relationships as beneficial to their business. According to SBOs, the top benefits of relationships with service providers are leveraging the others’ expertise and saving time. Since many people are preoccupied with the day-to-day running of their business, it’s no surprise that credit cards (45%) and tax services (41%) were listed as the most useful financial services for business owners.