The COVID-19 crisis has been a painful reminder for the business community that hard times are unavoidable.
In uncertain times, it’s easy to slip into an “every man for himself” mindset. Although entrepreneurs are independent by their nature, cutthroat competition isn’t always the smartest strategy.
Why do tough times call for cooperation? Here are nine reasons why they’re great opportunities for teaming up:
1. Two is better than one.
When the economy falters, you have two choices: You can either fight for yourself, hoping to survive while the competition does the same, or you can work with others to stay afloat. Teaming up enables you to pool your resources and expertise.
Although you can always forge partnerships on your own, it’s easier to join an established group. Industry associations are a good example: Because members face similar problems, such as finding technical talent, they get together to find solutions.
Another is group purchasing organizations. By joining a GPO, you benefit from the buying power of the entire group. Many suppliers offer discounts for bulk orders, which no one member could meet by themselves.
2. Everything is salvageable.
If you’re willing to put in the effort, every product and service line is salvageable. What if you don’t have the resources to do it yourself? Then strike up a partnership with a company that does.
Take Trimeras, a small biotech company that developed an AIDS drug. Despite the drug’s effectiveness, Trimeras couldn’t seem to commercialize it. Instead of ditching the project entirely, it partnered with a major pharmaceutical company on production, marketing, and distribution.
By teaming up, Trimeras was able to make something out of nothing. While it won’t be able to claim all the profits, cooperating ensured its investment didn’t go down the drain.
3. Getting along is less stressful.
If COVID-19 has taken your stress levels up a notch, you aren’t alone: According to the Kaiser Family Foundation, 53% of U.S. adults say the virus has negatively affected their mental health.
If stress management is an issue for you, stop worrying about winning. It’s not worth jeopardizing your mental health, not to mention that of your team members. Cooperation is proven to be better for your mental well-being than competition.
Take it easy until you’re ready to go all-in again. When that time comes, your partners will be willing to work that much harder to succeed.
4. Relationships pay off down the road.
Entrepreneurs you cooperate with today won’t simply forget about it tomorrow. Whatever happens to the economy, the relationships you build will remain valuable.
Relationships are like any other investment: If you dedicate yourself to them, you’ll see them grow. You never know which startup partners will grow into billion-dollar companies some day. If even one of them hits it big, you’ll be among the first to benefit.
To be clear, this isn’t to say you should cooperate only for selfish reasons. Getting to know people is rewarding in its own right, and it’s important to look out for those who gave you a hand.
5. Networking is the best way to bring in business.
Research by the Massachusetts Institute of Technology proves what entrepreneurs have long known: Leaders with large, active networks are more successful, both in terms of their revenue and their number of employees.
Business is less about what you know and more about who you know. Networking opens up opportunities, lands partnerships, and closes sales — all of which are tough to come by in a time like this.
If you aren’t willing to cooperate with others, you won’t be a successful networker. The best networkers are helpful people who genuinely want to lend a hand.
6. Businesses run on teamwork.
Remember, your team members will also be under stress during difficult times. It’s not just important to cooperate with other organizations; it’s also important to promote cooperation within your own.
While a certain amount of competition can be motivating, too much of it can be downright discouraging. When in doubt, ask your team. Are people worried that they’ll be on the chopping block if they don’t make the most sales every month? Do they understand that everyone is in it together, regardless of who happens to win each month? Don’t underestimate the feelings of support and togetherness during uncertain times.
7. Your brand needs the boost.
Hard times bring out your true colors. When people can’t pay the bills, is your brand understanding and gracious? Or does it extract every last dollar it can from people, no matter their situation?
Nearly two in three consumers prefer to purchase from purpose-driven brands. If your only goal is to make money, most of your customers will think about taking their business elsewhere.
Particularly at a time like this, helping those in need is a social purpose everyone can get behind. And because consumers have long memories, they’ll continue to reward your goodwill well into the future.
8. Mashups make for the best products.
Remember Taco Bell’s Doritos Locos Tacos? Of course you do — they were the fast-food phenomenon of the decade.
When sales are hard to come by, tapping a partner’s customer base is a smart way to boost sales. The good news is, every sector has opportunities for product mashups; all it takes is a little creativity. Take trash bags: Realizing that nobody likes the smell of trash, Glad partnered with Gain to develop bags that won’t stink up a kitchen.
What if you’re in the B2B space? If anything, business product partnerships are even easier to forge. If you’re a 401(k) provider, maybe you can team up with a bank to broaden its investment offerings — in exchange for simpler transfers and better rates, perhaps. An email marketing company is a natural ally of a social media consultancy.
Cooperation may be key in a time like this, but the truth is, it’s rarely a bad idea. While competition has value, letting mutually beneficial opportunities go to waste isn’t a good business move. In those situations, go ahead: Put on a smile, offer something of value, and strike up a partnership.