05/ 25/ 2006
by Emma Johnson
If you're looking for capital to expand your small business, you might not have to look further than a large brand in your industry. Five years ago, Bob Roncker found success partnering with a large, national corporation instead of running away from it.
For more than 20 years, Roncker ran his successful Cincinnati-based Running Spot, an athletic shoe retail business, before footwear giant New Balance approached him about opening a concept store there. "I wasn't looking to expand," he says. "I was going along and doing my thing; I was pretty satisfied."
But the New Balance offer was so intriguing, Roncker decided to give it a try. Under a license agreement, New Balance outfitted a new retail space with about $100,000 in slick, brand-specific fixtures, an advertising stipend and an attractive financing policy on the initial order. Roncker's Running Spot store occupies a lower level of the same building, where his locally well-known business maintains its original flavor. Advertisements in local media use both the nationally known New Balance name, as well as the Running Spot moniker, which area athletes have known for decades.
More feet on the ground
"It has helped expand the types of individuals we're able to serve," Roncker says. For 20 years, Running Spot was a haven for athletes, but the products were fairly limited to runners and walkers. The New Balance store carries a wide selection and wider sizes, which offers Roncker's customers more choices. And it hasn't stomped out Roncker's ability to carry other brands; just down the stairs, Running Spot still sells many other brands.
No money changed hands in the deal. Roncker gets a nice store and an expanded product line, while New Balance sells a lot more shoes.
No money down
A "one-plus-one-equals-three" frame of mind is the genius behind partnerships between small businesses and big brands, says corporate lawyer Jim Alterbaum, partner with New York law firm Moses & Singer and a specialist in entrepreneurial and middle-market businesses. "It's very, very hard to raise money, especially in a small market," Alterbaum says. "The advantage of strategic relationships is that they validate the small-business owner's concept without money."
NFIB.com
Find more ideas on ways to grow your business in "Strategic Planning" in the "Managing Growth" section of www.NFIB.com/toolsandtips.
