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Teaming for Success: A Strategic Alliance for the Small
Business Entrepreneur
By Frances T. Nevarez
Past President of National Association of Women Business Owners,
California Chapter
"The Tribune Company Buys the Los Angeles Times"
"America Online, Time Warner Propose $163-Billion Merger"
Mergers, consolidations, and joint ventures are frequent
headlines in business pages, as every industry in corporate
America, from telecommunications to media to healthcare engages
in this practice. According to a recent study by A.T. Kearney,
40 to 70 percent of companies surveyed are considering a merger
or acquisition in the next 18 months.
What is not making headlines is that more and more small
businesses and entrepreneurs are finding alliances to be of
significant strategic advantage. As larger firms continue
to downsize their supplier base and centralize, small businesses
are feeling the crunch. Growth-oriented small businesses continually
watch and listen to their customers, competitors, federal
institutions, and public and private sector firms, monitoring
the impact of these organizations' business decisions on their
own marketing strategies.
Many entrepreneurs eventually face the prospect of selling
their business, acquiring another business or merging with
another company, possibly even their competitor. Reasons for
doing so range from generating an influx of financial capital,
gaining access to more human resources, increasing marketshare,
and distributing the workload. For a small business, forming
a profitable alliance can help the business not only survive
but thrive in a competitive environment.
The first question to ask yourself is: Can you get to where
you want to go alone? If the answer is no, then start talking
to other business owners. Network, interview and brainstorm.
Clarify your goals, personally and professionally. What is
it that you want to achieve?
There are a variety of options to consider - merge, sell,
or partner. Some of the downsides of merging or selling are
that you lose control of the company you worked so hard to
build, or that you may not receive what you think your company
is worth. However a joint alliance, or teaming up, can provide
an ideal and unique alternative - team up through a contractual
agreement to provide services, yet stay independently owned
and operated.
When looking to team up with another business, find a company
that complements and expands your services, improving your
competitive edge. Discuss your strengths and weaknesses, evaluate
your existing and potential marketplace penetration, and strategize
how you would work together. Evaluate the following characteristics
of both companies and determine if they will fit well together
and/or increase your value to clients:
- Management Styles
- Human Resources and Expertise
- Services
- Target Markets
- Customer Service Philosophy
- Reputation in the Marketplace
- Technology/Equipment
Once you've found a potential match, do a couple of projects
together and see how it goes. Choose a client with which you've
already built a reputable relationship and get their feedback.
Try bringing employees of both companies together for some
type of gathering -- a team building session, luncheon or
party.
Forming a profitable alliance can present real challenges.
Some of the difficulties include:
- Establishing a strong ongoing relationship with people
not used to joint decision-making.
- Sharing power and control to work as a team
- Putting together employees who might not get along
- Sharing credit and recognition.
However, teaming up with the right partner can leverage power
and increase financial stability, helping a small company
to effectively compete in today's ever-changing marketplace.
The rewards can include personal and professional growth,
immediately strengthening and growing your visibility and
marketing efforts, and expanding your eyes and ears out in
the business arena. A successful alliance can mean a more
profitable bottom line, which can be mutually beneficial for
all.
Frances T. Nevarez is president of //PowerUP!,
a San Jose, CA-based firm founded in 1992 to provide businesses
with computer software training tailored to the needs of the
user. //PowerUP! strategically aligned with PROVISTA Software
International, an IT technical staffing and consulting firm
based in Fremont, CA. Nevarez is also on the Board of Trustees
of the Indian Business and Professional Women's Association
and is the Pacific Region Area Vice Chair of the National
Minority Supplier Development Council.
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