With the way the economy has been over the past three years, you might be having trouble seeing any bright spots. A report came out several months back that said we are officially out of the recession, but looking at the unemployment numbers and empty storefronts in so many cities around the country, you have to wonder. To a struggling business owner, or worse — one who has had to close up shop — you can call it whatever you want, but these are hard times.
So are there any bright spots? There always are. One is the number of people who are pursuing entrepreneurial ventures rather than looking for employment. Entrepreneurship has taken off in the past couple of years like never before. That's good for the economy, and it's especially good for those who are finally going after their dreams, rather than finding a J.O.B. sitting in a cubicle all day. Also, a down economy forces many entrepreneurs to think outside the box and come up with new ways to market their companies and to serve the needs of their customers. This leads to innovation and progress in technology, CRM, and other areas that directly affect a company's bottom line.
So, What's an Exit Alliance?
Another potential opportunity that has always existed to some extent, but has been highlighted by the economic woes of so many business owners, is the forming of exit alliances. This may be one of the best kept secrets in business development and strategic planning, and it can take your business to new heights, literally overnight.
If your industry has been hit hard by the economy and you're feeling the pain, you can bet your competitors are too. In fact, you might be shocked at the number of competitors who are ready to retire early or throw in the towel. Creating an alliance with these folks is a win-win in every sense of the term. An exit alliance is essentially an agreement through which your company takes over the accounts of a faltering company, in exchange for an ongoing percentage of the revenue from those accounts. They get a steady income that might not be huge (the percentage can be as low as 5%), but it's more than they would get by just going out of business, and you get immediate, sustainable business growth. This doesn't translate for every industry, but there are plenty where it makes a lot of sense.
How to Form Exit Alliances
How on earth do you broach this subject with anyone, let alone someone you've been competing for business with for years? Well, first of all, you obviously don't call them up and say, "Hey if you're thinking of closing your doors, can I have your customers?" Even if they were two days from walking away from their business, they'd never respond favorably to that kind of approach.
As with so many processes in business, successfully forming an exit alliance is about building relationships. In today's business world, competitors are more likely to be civil, and even helpful, to each other than ever before. Sure, they're still your competitors, and you want to win in the competitive game, but it's more like the boxers who hug after a fight than dirty, below-the-belt tactics to take them out of the bout.
If you're not already doing so, start networking within your industry and within your business community. Get to know the others in your industry and talk about how business is going. All you need is one or two people in your market space to allude to the fact that they're thinking of calling it quits, and you've got a perfect opening to propose an exit alliance.
Imagine your two closest competitors forwarding their business phone lines to you and giving you their customer lists so you can introduce your company. That could mean immediate, explosive growth for your business with no out-of-pocket expense, except possibly attorney's fees to draw up the agreement. With a deal like that, you'll be asking when the next recession's going to hit with optimism rather than dread!
Have you or anyone you know ever formed an exit alliance or similar arrangement? Share your experience in the comments section below.