How Strategic Relationships Create Successful Financing Opportunities For Business Owners

How Strategic Relations Create Successful Financing Opportunities for Business Owners

By Karlene Sinclair-Robinson

Building strategic relationships, or alliances, is vital to any business and its survival. Defining these relationships and possibilities for future benefits should be in line with your core values, vision, and mission. These strategic alliances should always create win-win opportunities for all involved. The ‘win-win’ concept must be the case all around. Strategic relationships can also be beneficial to you during times of financing need, especially when you may not a good fit for traditional bank financing.

Are you a people person? Or do you enjoy your own company more than being around others? When you think about the make-up of an entrepreneur, there are so many different facets to consider. Entrepreneurs always have needs as ever-changing. Some of these needs can be fulfilled internally while many others must be satisfied via external sources or methods. The ability to work with others is vital to our survival. It does not matter how much of a loner we are in our private lives, building a successful business requires that we connect, partner, and learn to work with others. This enables us to individually, and collectively, reach our goals.

Our goals cannot and will not be accomplished solely by our efforts. We must collaborate with others in ways that will bring about the results we seek. Whether we try to improve the lives of others through the sale of more products, or if our goal is to increase our client base, we must endeavor to build those relationships that will foster growth. Being selfish and making it about ‘me’ or ‘my business’ will certainly not build those strong relationships we may need in the future. The ‘WIIFM’ (what’s in it for me) mentality must go. You will certainly not weather the ups and downs of being an entrepreneur without successful relationships.

Financing Through Strategic Relationships

Strong strategic relationships could be beneficial in areas of client referrals, increased sales, contracting opportunities, hiring new employees, expansion possibilities and most of all when financing is necessary. What does your cash flow say about your business and its current financial position? If cash flow is a problem, how do you solve it? What do you do to improve your balance sheet? How do you end the year with your profit and loss statement showing a favorable cash position?

There are only two instances when an entrepreneur will require financing. These instances occur when there is a need to grow the business or survive an economic roller coaster. Can you come through either situation without the help of others? There will always be instances when financing is needed. Do you wait till it is time for a cash infusion before building a banking relationship? Do you seek out alternative financing methods only when there is a need? If speed is a necessity when you need financing, how do you expect to get the funding if you do not have a relationship with a lender or other strategic source?

Seeking financing where there is no prior relationship, to me, is like asking a person to marry you on the first date. Can you imagine them saying ‘yes, I will’ immediately? Building a relationship creates a firm foundation. What foundation are you building yours on? People need to get to know you, and you need to get to know them. If you want to build your business to a sustainable level of success, step outside your comfort zone and start creating those opportunities for others to get to know you.

Benefits to Strategic Relationships

There are tremendous benefits to strategic relationships. These relationships will only get better when you nourish them. Opportunities will appear when you least expect them. People will remember you when they are in need, or see an opportunity that would be a good fit for you. You will know whom to approach when you need flexibility and fast financing solutions that can deliver. Whether you are bidding on a government contract, buying a business or purchasing a piece of real estate, the need to bridge the financing gap in such business transactions is critical to your success.

Delivering on such transactions tells how strong your strategic alliances are. This is where we say, ‘it can make or break a deal.’ When there is a shortfall with the financing amount you need, and traditional sources (banks) are not the solution, your strategic relationship can make it happen. You will be able to joint-venture on deals and make massive profits if structured correctly. You can create more business opportunities through ownership, becoming an investor in other companies and be able to leverage your time, resources and contacts to benefit those involved.

Why? You took the time to build those relationships. You did not just create them for your benefit only. They trust you. You believe in them. You know they will be there for you. You would also be there for them in their time of need. They will do their utmost to help you succeed. When they are successful, it reflects on you. When you are successful, it reflects on them through these unique relationships. We know then that the phrase ‘win-win-win’ is true.

Where Do You Find Strategic Sources?

Finding these individuals is not that hard; however, it is in finding quality sources that is important. Take a look at your business. You are already doing business with some of them. What are the services you engage in operating your business? You should have a few of these sources in your Rolodex: banker, accountant, marketing, human resource, and technology professionals. Being a part of a networking group or industry-specific association could help make the right connections.

One of the biggest markets now to help you build such alliances is social media. You have heard of Twitter, Facebook or LinkedIn. Don’t know how to use them? Get started today by attending training workshops. Social media has leveled the playing field in how people connect. No longer do you have to go through so many sources to get noticed by a company.

What is impressive is this; wherever you meet people, there is always the opportunity for something good to happen. So, whether you are attending a parent-teacher association (PTA) or homeowners’ association meeting; going to the grocery store, hair stylist, or even at ‘happy hour,’ you never know when you might meet that one individual that could change the course of your journey. You might be on a flight going to or coming from a business gathering or vacation. Always be on the lookout as opportunities abound everywhere.

Success or Failure: What History and Successful Entrepreneurs Can Teach Us

If you were to take the time to read up on some of the most successful entrepreneurs in history, you would find that their success came from the strategic relationships they built and nurtured throughout the years. These relationships did not end when they became successful. No, they developed lifelong relationships that spanned decades. Some have even passed on from one generation to the next and continue today.

I am sure you have heard the phrase, “Your network determines your net worth”. The concept of who you know and your connection said network helping to determine your net worth is true. If you associate with unsavory characters, you know what the results will be. If you associate with like-minded individuals seeking to make a difference in this world, then the possibilities are endless. You should be able to learn from them, and I am sure you will bring something of value to them. Having a ‘go-giver’ mentality when it comes to the people in your network will also make a big difference. Check out Bob Burg’s book – The Go-Giver. It spells it out in a simple process.

It is essential to understand that history repeats itself. So, why are you reinventing the wheel? Those who decide that these relationships are not necessary will fail faster. Those who take the time to develop these alliances and make them stronger will reap the benefits. They will see all types of opportunities appear. They will be able to achieve success much faster than those who choose to avoid such relationships. Why not get some books on, say, five of the most successful entrepreneurs you can think of that’s making a difference? Make sure they are names that come to mind immediately. See what you can learn from them, and then use whatever method you are comfortable with to build those stable relationships.

Napoleon Hill once said, “Great achievement is usually born of great sacrifice, and is never the result of selfishness.” You should consider getting the audio and paperback versions to these two works by Hill: ‘Think and Grow Rich‘ and ‘Keys to Success: The 17 Principles of Personal Achievement.’ They are some of the best literature on this concept of building strategic alliances.

Does this mean that all strategic relationships will work? No, it does not! This effort also requires due diligence in ascertaining whether or not this connection will be a good fit. I will reiterate my earlier statement in the first paragraph, the second line. Does this opportunity to build a relationship reflect your values, vision, and mission? If they do not, then this is not for you. Remember, not all business deals are right for you; the same goes when considering strategic alliances. It is essential to keep in mind that if it does not feel right or sit well with your conscience, then you probably should not be involved as it would not be the right strategic relationship.