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It may pay firms to join forces

April 29, 2013

Many great business ideas fail because of lack of profit or enough market share. But it doesn’t have to be that way. James Leavelle, ASU-SBDC Business Development Specialist provides an option to small and struggling businesses in this week’s Business Tips that might just require a little teamwork to make a small idea, a big success…

SAN ANGELO, Texas — Sometimes a business idea comes along that is a great idea and as a business would be popular, but isn’t enough to succeed on its own merits.

Here, to succeed means make a meaningful profit. This business may be able to operate at the break-even point or slightly better, but cannot make a significant profit.

Some of the reasons for this could be the city or area demographics are inadequate to support the business or demand for the product or service is too small. Or, the scope of the business is too narrow, like a bakery that only sells loaves of white bread. No wheat bread. No cakes or pies. No dinner rolls. That isn’t necessarily bad, as long as the bread is really, really good. But even then, it may not be enough to be successful.

Does that mean that the entrepreneur shouldn’t start the business? No. But, what the entrepreneur may want to do is to look for another business in which to develop a complementary partnership.

These type of partnerships have many options available. They typically are not formal partnerships, but may be better described as relationships where each business feeds customers to the other. They can even create package deals for their mutual customers in order to capture a greater share of the market.

For example, a wedding photographer and florist may develop a complementary relationship using the ideas above to improve their market share position. A wedding photographer and a pastry chef specializing in wedding cakes might do the same.

It might even be advantageous to see if co-locating is possible and feasible. A family photographer — or a photographer specializing in infants — might locate next to the small infant and toddler clothing store. A massage therapist might locate next to a beauty salon.

There are a lot of great business ideas that work on their own merits in the big cities where there is a greater source of demand. Many times such businesses aren’t as successful in the small towns when they try to stand alone. However, when the entrepreneur networks and finds a complementary business to build relationships with, their chances of success are much improved.

The advisers of the Angelo State University Small Business Development Center can assist you in finding that complementary business for your business.

“Business Tips” was written by James Leavelle, Business Development Specialist and Certified Business Adviser I of Angelo State University’s Small Business Development Center. Contact him at

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