A Case Study - The Barber and the Coffee Shop

The idea of businesses operating in isolation is essentially a thing of the past. Regardless of your business niche, business to business collaboration is a fantastic way to add value to your services, extend your reach to a potential new client base and take advantage of others’ established reputation to boost yours in the marketplace.

Today businesses are collaborating with other businesses more and more by pooling their resources and expertise to develop new products, expand into different markets or increase operations.

Simply put, two heads are better than one.

One of the most well know business collaborations examples in recent times is the joint partnership of Kayne West and Adidas. Adidas’ co-branding relationship with Kanye resulted in a cult-like frenzy that led to Adidas’s net income to climb to $1.9 billion in 2019.

Carlos Slim , the Mexican business magnate who was ranked the richest man in the world from 2010 to 2013 by Forbes with a net wealth of $48 Billion was asked his secret to his rapid wealth creation and his answer was by using Joint Ventures. Leveraging others to create his wealth.

Wealthy people understand leverage. That is why they are wealthy. People struggling in business don’t. That is why they struggle.

I have scratch built all my businesses, and I have used Joint Ventures (Business Collaborations) to achieve record growth and profits with very little capital outlay, very little infrastructure, and very little experience in unknown industries.

Everything you need to start, build and grow your business already exists. It is already out there. You just have to learn how to tap into it. And the way you do that is by using Joint Ventures (Business Collaboration) and that what this blog is all about.

But what exactly is a business collaboration and how can it help you and your business excel and grow?

Business to Business Collaboration

What is a Joint Venture (Business Collaboration)?

Joint ventures are just a business relationship formed between several companies or individuals where they combine efforts, resources, infrastructure, and expense to obtain a common goal of making greater profits and enjoy greater growth than if they worked on their own.

A good analogy is to think of businesses operating solo as like little individual water puddles. But when they join together through Joint Ventures, they become a stream or a river, much stronger, bigger, and harder to stop. Joint Ventures can also be called Strategic Alliances, Collaboration or Partnering as well.

For example, an overseas business could join forces and work together with a local distribution company in order to sell its products in the local market. Or a small event planning business could create a collaborative partnership with local hotels, liquor stores, party hire and bed and breakfast outlets. Their collaboration agreement would see them promoting each other’s products and services to clients with an agreed profit percentage split.

At its most basic, a business joint venture is when two businesses agree to work together towards a common goal. They usually have complementary strengths, resources and commonly shared values.

Why create a Business Collaboration Partnership (Joint Venture) for your business success?

There are lots of reasons why your business may consider entering into a strategic joint venture partnership with another business. The potential for new product or service creations through innovation, expansion into new and unknown markets, partnership endorsements, shared digital marketing strategies.

Joint Ventures are the single fastest way to grow your business or start your business with the least amount of risk.

By taking a piece of the profits on every transaction that results from a Joint Ventures that you set up, you create ongoing, passive income for yourself.

Finally, collaborating with other business may give each business access to different suppliers, insight into new or existing competitors and other key players in your industry and access to a larger existing client database. This allows you to provide a better product and improved services to your current and potential new client base.

A business collaboration example – The Barber and the Coffee Shop

The best way to explain how Joint Ventures work is by showing you a real-life case study and you can see for yourself how powerful they are and why anyone can use Joint Ventures to start a business, grow their existing business and build, passive recurring income streams today with no experience, no capital and no resources.

Here’s what most barbers do: Open their doors, put a sign in the window, and wait for customers to come in the door.

Here’s what most coffee shops do: Open their doors, put out tables and chairs, and wait for customers to come in the door.

Maybe they could advertise, but how do you advertise a coffee shop and a barber to get people excited and in the door. Unless you have an incredible X-factor to make your business stand out from the crowd, nothing much is going to happen.

This is a long, hard way to build a business. Waiting for customers to find you, refer you and hopefully come back.

Would you agree? I’m right because as a small business advisor for over 13 years I observe the behaviours of businesses each day, and they all do the same thing as everyone else and hope they get a different answer.

Below is a great Business Collaboration (Joint Venture) story I hope will inspire you to think differently about building a business in a smarter and easier way.

I recently discovered a barber, Jake, in a shopping centre near me. He has a little shop tucked around the corner, way down the back where not even moths frequent. I found out he has been there 13 years, 13 years, yes,  and I have never been there in the 13 years I have lived here, and he is in the shopping centre I go to several times a week.

I do however visit a coffee shop in the same centre as Jake. The coffee shop is positioned right outside the busy supermarket. So here is what I suggested to Jake.

Do a joint venture with the coffee shop. Here’s how it works:

You, Jake tell the coffee shop owner:

If you simply refer any of your customers to me, I will offer them 25 percent discount off their haircut. And I will give them a free coffee voucher, which I will purchase from you.

In return you place my business cards at your cash register with a sign that says “ Want a Free Coffee and a 25 percent discount– See Jake the Barber, 25 metres down the lane”

Additionally, I will refer all my loyal customers to your coffee shop with a free coffee voucher.

The win for Jake the Barber

People are now suddenly aware he exists, just 25 m away from a busy coffee shop, so he gets a constant stream of new customers. He is just tapping into this already existing stream. His loyal customers also feel special as they get a free coffee. Smart. How many barbers or hairdressers do that for their customers? None that I know of.

The cost to Jake: A cup of coffee costs $5 for example. A haircut costs $30. A 25% discount is $7.50. So he still makes a $17.50 profit. But here is the real smart thinking that most people do not get. 

That $17.50 is money he never would have had in the first place. His joint venture set this up. And remember, that was their first cut. The next time the customer comes back to Jake’s, they will pay full price. So for the cost of a cup of coffee and a small discount, he now has a customer for life.

The win for the Coffee Shop:

They get a stream of Jake’s loyal customers, coming to them, rather than going to another coffee shop. Even though the voucher is worth $5, customers will always spend more money. They will bring a friend or two, buy a muffin or a salad, etc, so their spending is way higher than $5.  This is a great business for the coffee shop.

In this Business Collaboration, there is no risk and no additional overheads. Just smart thinking.

Now the real power of this is that this thinking doesn’t have to stop there.

The coffee shop could do deals with the local florist, the butcher, the dentist, the spice shop, etc. And so could Jake.

This is a smart business. This is the power of Joint Ventures. Far better than sitting, waiting for customers to find you.

Now is the time to incorporate more ways to collaborate in your business so you too can reap the benefits and see your business grow.

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Trying to survive in business can be exhausting, especially if you are always trying to solve the problems yourself. Are you frustrated, confused, and not sure what to do next? This is not how the picture of your business should look.

I understand this completely. I have been doing this for most of my adult life, and many times I have had to deal with struggles and pain alone

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