Virtually all business operators know of the concept of collaboration, but understanding the true value of incorporating it into a company is perhaps less standard.
What do a distiller, a tour guide, a commercial interiors contractor, a winemaker and a fertiliser manufacturer have in common?
Perhaps nothing, at face value, other than that they are all small business people. However, these are just a few examples of Aussie SMEs who are finding value in building business networks and collaborating with others to work towards a common goal: business growth.
What does collaboration entail?
In a business context collaboration can have two main purposes, which may stand alone or be pursued in conjunction with one another.
Businesses operating within the same industry may choose to collaborate to further their knowledge, refine their products or services and develop new technologies from which they can all benefit.
Indeed, this is something that Geoff Richards, the managing director of garden supplies company Richgro has found especially useful.
“We’ve got relationships with a company in Canada in particular, a company in the Us and several groups in the UK, and two in Europe – Germany mainly – where we have open dialogue and we don’t mind sharing things, because we always find if we give them something, they’ll give it back,” Geoff says.
This collaboration, he says, enables these businesses to learn from each other’s unique geographic experience and share innovations among themselves for mutual commercial benefit.
Furthermore, collaboration can transcend industries in order to deliver customers a superior overall experience. Think, for instance, about a hairdresser, make-up artist, photographer and caterer who all crossrefer clients and work with each other in the bridal space, or a real estate agent, conveyancer, mortgage broker, removalist and interior designer who work collaboratively to streamline the hassles associated with moving house.
In essence, collaboration requires a breaking down of the traditional mindset of viewing a business as a standalone entity competing head-on with its rivals, and an embracing of a more cohesive approach that delivers a mutually beneficial outcome.
Types of business networks
Chances are you already belong to some sort of business network or industry association. There are large associations for small businesses of all shapes and colours, including COSBOA and SMEAA. There are also industry-specific bodies and more geographic panels such as local chambers of commerce.
However, these networks often have as their core focus the representation of members as a collective to government and the media, rather than necessarily driving customer growth for individual businesses.
This is where community-based business networks can help business owners, particularly smaller operators, achieve growth. Lead sharing, referral partnerships, cross-promotional activities and the like can be found in operation right across Australia.
These communities may be organised to support particular groups of business operators and their customers (such as women in business or gay and lesbian business owners), targeted to particular ethnic or religious communities, or based across well-defined geographic areas (such as a particular suburb or region).
A case in point is All About Business, a small Sydneybased business network that operates under the global BNI organisiation.
The exclusive group of 53 members meets on a weekly basis with the express aim of helping one another drive business growth.
“I sort of look at it as if those 52 other people in the group are my marketing team. Any time they hear of an opportunity for me or for anyone else in the group, they are saying, “Hey, why don’t you give this person a call, I’ve seen their work and know what they do’, because through their exposure to the group, they have actually experienced or heard first-hand that what the people in the group do is good,” the group’s current president, Eric Brown, tells My Business.
“There’s no financial reward for giving someone a referral; we work on a ‘givers gain’ philosophy. So if you give as much as you can for the group and everyone is doing that, then eventually it’s going to come back around to you.”
As Eric explains, the group acts as both a lead-generation network and a support group for like-minded individuals, with everyone working together for mutual benefit.
“Instead of having passengers on the ship, everyone’s got their oars in their hands and is rowing along and no one is just dragging off everybody else,” he says.
But it is the referrals that are first and foremost the focus of the group, and that go on to generate a large part of members’ business.
“For me, referral marketing is such a massive part of my business,” Eric explains.
“Generally I close about 30 per cent of my deals, [whereas] in BNI, it’s probably 65 per cent of the opportunities I get, I close – just based on someone’s word of mouth.
“I’ve closed $1.1 million out of the group for the last financial year.”
Food for thought
However, you don’t necessarily need to be part of a formal business network or organisation – indeed, many businesses forge mutually beneficial relationships on a much less formal basis.
Take as a prime example the thriving Tasmanian food and beverage scene.
Tasmania has long been renowned for its stunning World Heritage-listed landscapes. However, in recent years the state’s cultural scene has been driving visitor numbers up, and at the heart of this success is a mixture of formal and informal business networks.
On a recent trip to Australia’s island state, My Business discovered a thriving industry where a diverse range of participants strive towards an overarching goal: showcasing Tasmania as a culinary and cultural wonderland.
Some vineyards hold whisky tastings, while others sell tasting platters of Tasmanian oysters, condiments and smallgoods. Restaurants actively promote local menu options and suggest accompanying local wines. Even James Boag’s Brewery in Launceston invites tour guests to sample local cheeses alongside its beer, with a full explanation of exactly where each one comes from.
With the support of the state’s official tourism body, Tourism Tasmania, these businesses – most of them boutique in size and nature – are helping to develop the perception of Tasmania as a playground for the tastebuds.
“We obviously love getting to share our whisky, just as any winery in Tassie, any cider maker in Tassie, any brewery in Tassie, any food producer in Tassie loves to share – it’s what you do it for, to share it with good people,” Chris Thomson, the head distiller at Lark Distillery, tells My Business.
As Chris explains, this active sharing does not just take place broadly across the hospitality and tourism sectors, but even within the craft distilling industry itself.
“Bill Lark, our founder, has helped lots of distilleries start, all across the world and Australia, and it was always a focus on this concept of ‘on a high tide, all boats rise’,” he says.
“So it’s not such a concern of ours that our competitor down the road – our friends down the road – are producing fantastic whisky. When Sullivans Cove wins best whisky in the world [the distillery won World’s Best Single Malt in the 2014 World Whiskies Awards, the first time a whisky made outside Scotland or Japan received the honour], we’re the first ones to get on the phone and say congratulations, have a whisky and catch up, because we’re here for whisky, we’re here to enjoy the experience of drinking whisky, and it’s more fun with friends.”
Chris says this perception is common right across the industry.
“I think the industry feels like that – we just want to help each other and make sure that Tassie is producing the best whisky it possibly can.”
While Lark produces all its spirits in a small factory on the outskirts of the city, the 24-year-old company is renowned for Lark Cellar Door & Whisky Bar on Hobart’s waterfront.
Here, Lark sells its own full range of whiskies, gin and liqueur, as well as those made by all of Tasmania’s distillers, showcasing the industry as a whole to visitors from around the world and allowing it to diversify its offering from being simply a producer to being a tourist attraction in its own right.
“There’s 160 or so single malts on the wall, obviously ours and you can try every Tasmanian distillery’s [offerings], so it kind of becomes the hub for anyone who wants to come and experience Tassie whisky,” Chris says.
“We’re very small at the moment as individuals, but together we’re working on getting better and making more.”
Visitors to Tasmania will also find Lark and other local whiskies on the tasting menus at many vineyards, including Winter Brook in the Tamar Valley.
“As wine and cider makers, we learn a lot from the craft beer brewers and cider makers here in Tasmania. But not only them: it’s also the truffle farmers, cheesemakers and all the others involved in Tasmania’s primary industry that inspire us every day. Behind every single business there is a story,” says Nicole Huisman, who owns and operates the boutique vineyard with her husband Frank.
Traditionally, Australia’s prominent wine-growing regions have been the Hunter Valley in NSW, the Barossa Valley outside Adelaide, the Yarra Valley near Melbourne and WA’s Margaret River region. Yet a concerted push by growers in the island state is helping to build the profile of Tasmanian producers and their cool-climate wines.
“The Tasmanian wine industry is a small community where everybody knows each other. We all focus on the same thing: produce premium wines and put Tassie on the map,” Nicole says.
Tour company Gourmania Food Tours, which has been operating in Hobart since mid-2011, gives true meaning to the idea of collaboration. “I had experienced walking food tours in the US and thought the concept would be ideal for Hobart. I was enthusiastic about the opportunity the walking tour gave to share other aspects of a location, some historical and architectural background to the city, as well as getting real insights into the local food culture,” says Gourmania founder Mary McNeill.
She says her tours were initially very limited in scale and frequency, but have grown significantly since that time. Mary now offers between four and seven tours each week, depending on the season, and also does bespoke tours for private and corporate groups. These guided tours take guests to a range of local restaurants, cafes, bakeries, bars, delis and markets, allowing them to sample local produce and cuisines while learning more about the businesses, the industries and the area around them.
“The majority of businesses I approached jumped on board immediately,” Mary says.
“There just needed to be the element of mutual trust with the quality of the experience.”
Mary is a big believer in working collaboratively for the good of Tasmanian industry, and says it is impressive what these communities of small businesses are achieving by working together.
“There are business people out there creating new food regions, new industries. Perhaps they thought they were orchardists or farmers; perhaps they thought they were cheesemakers or distillers. [But] what they are is part of the overall picture, building Tasmania into a premium food and beverage destination,” she explains.
“We all respect and admire each other. The most successful in the industry are the legends we will forever be grateful to for putting the spotlight on Tasmania; it is about being proud of what is being produced here. It is so exciting to be a part of this renaissance in Tasmania.”
Benefits of business collaboration
- Boost your sales through referrals
- Provide your customers with a more holistic service beyond what you can offer
- Leverage off increased consumer awareness of your community
- Learn from the mistakes and successes of other businesses
- Create a support network
- Boost your spending power by making collective purchases
- Share costs for things such as advertising from which you all benefit