This is the seventh article in an eight-part series on how to help your small business compete with the big guys. Read part six. 

According to consulting firm Booz Allen Hamilton, strategic alliances are sweeping through nearly every industry and are becoming an essential driver of growth in the small business sector.

Alliances range in scope from an informal business relationship based on a simple contract to joint ventures for legal and tax purposes. For small businesses, strategic alliances are a way to work with others toward a common goal while not losing individuality. Alliances are a way of reaping the rewards of team effort.

A strategic alliance is essentially a partnership in which you combine efforts in projects ranging from getting a better price for supplies by buying in bulk together, to building a product together with each of you providing part of its production.

You can use a strategic alliance to…

• Increase market penetration;
• Enhance competitiveness;
• Develop new business opportunities through new products and services;
• Diversify;
• Create new businesses; and
• Reduce costs, among other things.

Strategic alliances are becoming a more and more common tool for expanding the reach of your company without committing yourself to expensive internal expansions beyond your core business.

Next: Leverage technology to grow your business