How Strategic Alliances Can Grow Your Business Exponentially (Example: Cash Flow Consultant)

The smartest marketers nowadays form strategic alliances with other companies that sell “complementary” products or services, whose “image” fits well with their own product or service.

Cross-promotions and cross-advertising can save big on marketing support dollars, while creating more awareness and an even better image for each of the products or services through reciprocal endorsement. Think Pillsbury chocolate chip cookies made with Hershey’s chocolate.

Sometimes the products aren’t even that complementary and a connection between them is almost impossible to see. But why not have a gecko advertise insurance and diamonds in the same ad, if it means shared advertising and media cost?

It’s called “Relationship Marketing” and is indeed a very powerful tool and a very smart move, as long as both products or services

• target the same customer

• do not compete

• have a compatible, positive image

How could this work in the cash flow industry? Let’s say you provide access to factoring dollars. You might “team up” with someone who specializes in purchase order financing or equipment leasing.

You can easily market to the same businesses and customers without competing with each other, as the two of you provide different, yet possibly very complementary products.

Imagine if both of you did the same amount of marketing for your own product. By cross-promoting each other, you would immediately double your marketing reach without any extra costs to either of you.

Now think about having another person on your team who specializes in, say, business plan writing for example! Again, same target group and no competition. You have just tripled your marketing reach and efficiency.

You can probably think of other “good fits” with your business that could equally increase your marketing reach and efficiency in the very same way!

The point here is that through “team marketing” smaller players with more limited time and monetary budgets can achieve faster and greater success by combining their resources and efforts.

Now, where do you start when forming such alliances? First, you need to have the right people, of course. It helps a lot when they are compatible and share the same vision and values. They also need to commit to the same goals, and each of them needs to “pull their own weight”. Motivation and determination are paramount. No free-loading or piggybacking for anyone!

Of course, if you have assembled such a team, you can even take it one step further and go from a “strategic alliance” to a full-fledged company formation.

Imagine, under a single company umbrella you could even qualify for group healthcare insurance rates and enjoy many other cost-saving benefits (e.g. common business cards, brochure, website, and other marketing support materials, etc.).

In addition to the cost savings, just think how much more ground you could cover with a like-minded team compared to what you could achieve on your own with your own, limited resources (both, time and money)!

For example, instead of dividing your available hours between phone calls, networking events, direct mail preparation, trade show attendance, and social media participation, you could divvy those tasks up between different team members and run those activities simultaneously instead of consecutively.

Think of the afore-mentioned cost saving opportunities. Let’s say you had $5,000 to build and run your business. If you do it on your own, you pretty much have to spend the money on operational cost and marketing just to keep the business going.

Now imagine you had three like-minded “partners” who all had $5,000 working capital as well. All of the sudden the “company” has $20,000 working capital. Even if you would now have to spend $8,000 on operations and marketing, the company would still have $12,000 to invest.

Now, the “company” could take, say, $10,000 of its remaining “investment capital” and – instead of just brokering cash flows – actually acquire some paper as well!

Congratulations! You have just created a double-income stream. One from brokering and one from investing.

In other words, the share of the “company’s” working capital that is being “invested” is now actually producing a direct return, instead of just being “spent” on activities that are expected to generate a return in the future.

That is a huge difference when it comes to the bottom line.

If you put that scenario on a forward trajectory, any surplus money the “company” generates (i.e., income minus expenses and taxes) could now flow into the acquisition of more paper (invoices or notes or tax liens or whatever else best fits the team’s short- or long-term investment strategy and goals).

Of course, it is a quite a leap to go from the idea of being a one-person cash flow broker to a multi-person team or company that not only brokers cash flows but also shares the risks of investing in them.

However, just like being a rocket scientist or a brain surgeon is not for everyone, investing in cash flows may not be for you.

The good news though is that the market entry barriers for becoming a cash flow investor are much lower – unless you’re already on your way to becoming a rocket scientist or brain surgeon, that is, of course.

But if you’re intrigued about the opportunities and challenges of brokering and investing in cash flows, just play it out in a plan and run the numbers (or let me know if you need any help).

If you think this all sounds great on paper but that it is way too difficult to pull off in reality, you might be right.

However, perhaps not necessarily for the “technical” reasons you probably have in mind. The real hard part about the whole thing is finding the right people with the right attitude and the right commitment with whom to team up.

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