Congratulations, you have created a successful business that is well respected by your customer demographic, but now what? How do you add value to your business without diluting your current marketing and sales efforts? This is a question that many companies ask themselves at some point in the evolution of the organization.
According to CleverISM.com, Synergy in business is “defined as the increase in competitiveness and cash flows beyond what the two companies are expected to accomplish if they maintain standalone operations.” This is sometimes expressed as 1+1=3. Two profitable companies when combined results in a better and stronger company. This is easiest to understand in the example of the car wash that sells floor mats, air fresheners, and other accessories to their clients on the way to the cash register. The car wash would be profitable without the accessories sales, but when combined the bottom line is exponentially increased.
This strategy works just as well when two separate companies are combined through a strategic acquisition. That is if you are large enough to consider that kind of thing. If not, you might consider starting a complementary business that focuses on the same customer demographic. But starting a new business that you are unfamiliar with might distract you from what you are already doing and slow the growth of your existing business during the development process.
An alternative to starting a new business can be found in the franchise world. Franchising offers you a proven model to a business that can be added to what you are already doing with very little cost. If you are a successful landscaper and add a mosquito spraying franchise to the mix you could significantly increase your offering to your customer base with very little added expense – 1+1=3! Many franchise brands will in fact combine synergistic franchise concepts under one roof in the hopes that their franchisees will take advantage of the synergies as they grow.
If you are a successful small business owner, now is the time to think about a strategy that will allow you to leverage the synergies of other companies be it by acquisition, partnership, or franchising that will allow you to grow your bottom line without added significant operating costs.