You know that old saying: Keep your friends close, but your enemies even closer. Although fellow small business owners in your niche aren’t exactly enemies, they are the competition. And, you need to know what they’re up to at all times.

Collaborating with competitors isn’t anything new, but it should be on your radar. Why? Because it benefits your business.

We’re All in the Same Situations

Think about the last industry-specific conference you attended or webinar you watched. During the presentations you chatted with your competitors, commiserated over pain points you both endure and probably even listened to others boast about their recent milestones.

Submerging yourself in this type of environment creates an abstract way to measure your own success. How many times have you walked away from a conversation with a competitor thinking, “Wow, I need to add that to my to do list” or “Ha! We implemented that months ago. We’re on top of that trend!”.

A Harvard Business Review article highlights the importance of strategic alliances. Collaborating with competitors strengthens both companies collectively, helps cut costs on mutual product development ventures, allows employees to learn new skills and opens company doors to shared markets and audiences.

It’s really a win-win.

You Need an Organized Plan

However, before becoming BFFs with the competition, some competitor collaboration guidelines need to be put into place. Outline your company’s strategic objectives and how the collaborative effort will both move you toward your goals and anticipate how the partnership could hinder your success.

For example, imagine a small dental clinic partners with a start-up personal care products company. Both companies promote dental health and sell products and services to achieve just that.

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The dental clinic offers whitening services, routine cleanings and even prescription-level toothpaste and mouth rinses.The personal care company offers a line of toothpaste, floss and mouth rinses. But, when they collaborate, something magical happens. If the dental clinic offers coupons for customers to get the dental care products, and the product producers remind their consumers that annual check-ups at the clinic are an imperative part of their dental care routine, customers of both businesses benefit.

On the flip side, what if both businesses offer a special teeth whitening package marketed to brides-to-be? That could cause some competition for a narrow field of niche customers and become a sore spot in the partnership.

At first glance, working with the competition may seem out of the question. But once you dig into how you can form a partnership and offer even more opportunities to your own customers through the collaboration, it all makes sense.

Start by brainstorming what you’d like to offer your customers, but you don’t have the resources (financial, staff, products) to do at the moment. Is there a competitor who you might be able to collaborate with to increase the value and options available to your customers?

Angela is a contributor to the Connectivity blog. She also writes about content marketing and working online at Web Writing Advice. Angela was ranked in the Yahoo! Top 1000 Writers from 2009-2013.