There are three ways to build a business - build, borrow or buy:
- Build: develop new business
- Borrow: temporary arrangements, including joint ventures and subcontracting
- Buy: buy an existing business and merge
Building and buying takes more internal resources, particularly cash to invest in assets and developing products and services. In the midst of the current recession – one that may be a real doozy – conserving scarce resources becomes the priority. To grow your business then, the best strategy is to borrow.
The Borrow Strategy brings together two organizations whose skill set, contacts and services complement one another. There may be overlap, but that can also be OK. For example, I have a good friend who consults in marketing. I do some marketing consulting, and his experience, skills and interests are more in the branding, medical devices and technology oriented companies. We don’t belong to the same business organizations and go to different meetings. But we can bring the other to a meeting, saving the other the cost of membership and only spending the meeting cost. We can also seek out different clients, and subcontract to the other for the respective expertise we may not have or would rather not do.
The Borrow Strategy can be for any number of things. It can be to share marketing efforts – each keeps an eye out for the other, making introductions and referrals as appropriate. Some may share production, or warehousing of a product that both may sell. Or, they may, as my friend and I do, seek out bigger and more complex projects and bring in the other party to both sell and execute a project.
"When you ain’t got the money, you’ve got to think". So said Samuel Johnson three hundred years ago – it’s still one of my favorite quotes. So think.
And call a friend.