Implementing a Strategic Partnership

Teaming with other entrepreneurs can expand your reach

0824_ENT Nicole JonesEXC

Nicole Jones, owner of Chicago-based shoe store Sensual Steps Inc., formed partnerships with other local businesses to increase profitability.

When business is slow and consumer spending decreases, solidarity between entrepreneurs can help drive sales and possibly cut down on marketing costs.

“There is potential in strategic partnerships to operate at lower costs through shared services or joint purchasing,” says Leonard Greenhalgh, professor of management and director of programs for minority and women-owned business enterprises at the Tuck School of Business at Dartmouth College.

Owners can form strategic partnerships with companies that sell complementary wares, those that sell merchandise that is entirely unrelated, or even form an alliance with a business that sells the same merchandise or services as theirs. A complementary alliance, for example, would allow a business that supplies parts for a home construction project to work in tandem with another business that provides the installation.

“Most minority-owned businesses are small. Ninety-six percent make less than $100,000 per year in annual revenue,” Greenhalgh says. By combining the capacities of two or more struggling small businesses, the new entity will function as if it were much larger and provide a more complete solution for the customer.

When her sales dropped by 20% in 2008, Nicole Jones, owner of Chicago-based shoe store Sensual Steps Inc., realized that she needed to unite other businesses in her predominantly black community to build awareness and drive traffic to their stores. The strategy had worked for her before.

Her shop is located in Bronzeville, an area that after several decades of blight has struggled to develop a strong customer base. Back in 2006, on the one-year anniversary of her company, Jones took the idea of driving traffic literally. She rented a trolley for $600 and had the trolley take shoppers between five different Bronzeville businesses for four hours. The strategy brought in $10,000 for her store that day and introduced her to clients who didn’t know her store existed. It benefited the other businesses as well.

This year, Jones and other business owners, along with the Quad Communities Development Corp., started UB2, United Bronzeville Businesses, a nonprofit organization created to strengthen the Bronzville business corridor. “All of our businesses were suffering [as a result of the recession]. Some stores were trying to make the decision to either close down or stay in business” Jones says. “We decided to pull together in a collective effort to share resources, share networking opportunities, and entice people to come to Bronzeville to shop.

Each of the 10 businesses involved has agreed to pay $150 towards a major media event on Sept. 25 and 26. Each store has begun carrying a huge UB2 poster that advertises all of the Bronzeville community stores. The local restaurant, bakery, and liquor store will provide complimentary appetizers, desserts, drinks, and run the trolley tour again. In addition, they want to make a movie about their shopping district to be played on local television stations. Through cooperative strategizing the group plans to spend only $1,500 dollars for a two-day event that typically costs more than $5,000.

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  • http://blackvegas.com John Harrison

    This was a very informative article. The power of your network and your friends and partners network is important. Gets back to the old cliche a “A Bird in Hand Beats Two in a Bush” Black business tend to let money walk out the door sometimes because of pride. When the end is near no one should realize it better than yourself. Being proactive and using the techniques in this article, might save your business. Good Job!!!

  • Suzan

    This article was not only helpful but motivational as well. The decision to partner with others created a choice to preserve the present and aid to the future success of our communities. What great vision and strategic planning. I am proud to spend my limited resources to promote the brilliance and success of the business featured.
    Suzan

  • Cornell

    It’s about time Sensual Steps was acknowledged for making a positive difference. I would like to say that each employee she selects acts with the same guided passion to make every experience a great one. The service is second to none and they even call you to let you know how much they enjoyed working with you. My wife was blown away by a phone call she received from one such employee and she raves about how everyone makes her feel special. Please continue the great job and I will continue to make sure her feet stays as happy as she is.

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