Who is Martha Matilda Harper?

 

Unless you are a real devotee of business trivia, you may not know that the International Franchise Association (IFA) named Ms. Harper the first franchisor ever, for her 1891 invention of Harper Method Shops, a hair salon franchise system that, at its peak, numbered more than 500 shops.

 

However, despite the IFA’s designation, the actual first recorded franchisor in U.S. history is none other than Benjamin Franklin. In 1731, Franklin entered into a partnership with Thomas Whitmarsh, so he could carry on Franklin’s printing business in Charlestown, South Carolina. Among other requirements, Whitmarsh was obligated to reprint some of Franklin’s writings, work exclusively for Franklin, and buy all of his printing materials from Franklin as well.

 

What Ms. Harper and Mr. Franklin have in common is that they both knew that the way to grow their business was by teaming up with the right strategic partner.

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So what exactly is a strategic partnership?

 

A strategic partnership is an agreement between two companies where both businesses team up to share resources, information, finances, and so forth for mutual benefit. Typically, one partner provides expertise, customers, services, or products needed by the other partner and the other offers something synergistic in return.

 

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The result is that the two businesses can do more together than they ever could alone. Martha Matilda Harper could have never opened a chain of 500 beauty salons without teaming up with those early franchisees. Franklin was able to expand his reach by having a partner in what was then far off South Carolina.

 

With a strategic partnership, the whole is greater than the sum of the parts.

 

The value of a strategic partnership will vary for each company and the benefits one business gets from the other will likely differ. In the franchisor-franchisee example for instance, the franchisor provides the franchisee with a proven success system while the franchisee gives the franchisor exposure and income. Each brings something different to the table, but each is also better off by virtue of the partnership.

 

Strategic partnerships have additional benefits as well:

 

A shared customer base: Small businesses are always looking for ways to find new customers and a strategic partnership is a great way to do that.

 

Increased viability: The fact that your partner is willing to co-brand with you creates instant credibility in the mind of their customers. Not only will you gain immediate exposure, but that exposure will be via the always-great word of mouth.

 

Better data: It’s no secret that we’re in an era of big data. Another benefit of a strategic partnership is that it offers both companies the opportunity to construct a much more comprehensive customer profile.

 

Potential expansion: Another great part about strategic partnerships is that they give both businesses an increased opportunity to expand into previously unreachable areas. By utilizing the resources of their partner, each company is able to harness the power of two sets of established customer bases while also reaching an entirely new set of customers.

 

Shoring up weaknesses: Every business has its strengths and weaknesses. The solution to weaknesses are strategic partnerships. By identifying your weaknesses and finding strategic partners to complement them, you can fill your gaps.

 

So yes, finding the right strategic partner would be a good investment of your time or as the wise old Ben Franklin might put it,

 

“An investment in knowledge always pays the best interest.”

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

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Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.  ©2016 Bank of America Corporation

 

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