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The Business Within…

Matryoshkas dollsSymbiosis can be defined for business purposes as “any interdependent or mutually beneficial relationship between two persons, groups, etc.” [www.dictionary.com] Symbiotic businesses exist as a “business within a business.” There are several forms that a “business within a business” may take.  The two businesses may each be visible to customers as separate entities.  Or, like matryoshkas, the nesting Russian dolls, the symbiont business may be hidden inside the host business and not readily noticeable to the customer.

The consumer deals with “businesses within a business” every day without thinking about them or, in the case of ‘invisible’ businesses, noticing them.  Some common examples of visible ones are:

 

 

  • Food business in a convenience store.
  • Computer repair service in electronics retailer.
  • Massage therapist at day spa or hair salon.
  • Nail tech in a hair salon.
  • Investment service firm located within a bank.

‘Invisible’ businesses are those where the consumer does not see a prominent business name and may in fact be billed by the host business for services received.  Some examples of these include:

  • The isles in the supermarket that are leased to bakeries, soft drink, and cereal companies who are responsible for design, layout, and stocking of the products.
  • The jewelry, appliance, or shoe areas in a department store that are leased to individual entrepreneurs.
  • The optical, hearing, or watch repair departments in a superstore.
  • The window tint or detailing services at a car wash or oil-change facility.
  • Bicycle repair service located in a sporting goods store.

Locating a business within a business has advantages for both companies if they share the same target customer while providing non-competing products or services.  Each business attracts customers that are also potential customers for the other company.  Ultimately, each business should have a larger sales volume than it would if it were located in a separate stand-alone location.

Businesses within a business that maintain their visibility generally have sales that are independent of each other.  For example, the consumer may purchase gasoline at the convenience store, but not a sandwich, purchase the sandwich only, or purchase both gasoline and the sandwich.  The symbiotic relationship brings the other business a potential customer, but not a related sale.

Businesses within a business which ‘invisible’ usually have products or services that are integral to those sold by the other business.  Examples are installation services (appliances, cabinets, wallpaper), assembly and delivery services (furniture), or repair services (bicycles, computers).

There are many advantages for both the host and symbiont businesses when a businesses within a business is established.  The host entrepreneur is able to:

  • Attract new potential customers without additional marketing expenses.
  • Share the facility cost (offset rent).
  • Share advertising costs with co-operative promotions.
  • Have ready access to another business owner with whom to discuss common management issues.

The symbiont business’s entrepreneur:

  • Realizes lower facility cost by renting space needed, not an entire store.
  • Has access to the host business’s customers.
  • Can share advertising costs with co-operative promotions.
  • Also is not operating “alone” by having the host entrepreneur to network with.

There are many articles available on how to create a new symbiotic business, as well as how to expand your existing business by creating symbiotic relationships. Two quick articles to read are:

  • A Business Lesson from the Hippo – how you can use symbiotic relationships to succeed, published by New Hampshire Strategic Marketing [http://nhstrategicmarketing.com/a-business-lesson-from-the-hippo-how-you-can-use-symbiotic-relationships-to-succeed]
  • To overcome your company’s limits, look to symbiosis, published by Harvard Business Review [https://hbr.org/2013/06/to-overcome-your-companys-limits-look-to]

By: Dr. Philip R. Geist, FSBDC at UNF Area Director

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