Partnering

With so much focus on size of companies recently, one truly can become befuddled over how the LA Lakers qualified for what was supposedly called a Small Business Loan. For many of us considered small business, we may actually be Micro Businesses and working relationships with a few ‘Partner Affiliations’ may be a more effective way to grow our businesses.

So, what is a Micro Business?

Wikipedia provides this definition:

‘A micro-enterprise is generally defined as a small business employing nine people or fewer, and having a balance sheet or turnover less than a certain amount.’ That amount, prevalent on many sites in a general Google search seems to be annual revenue less than $250,000.

As more entrepreneurs and self employed sole proprietors grow in numbers, so shall this category. Perhaps, one day it will be given its proper due and be extricated from the panoply of firms that fall into the general category of small businesses, where often the number of employees must be less than 500. There is a stark difference in firms that are sole proprietors and those with 500 employees.

As a Micro Business, one of the most successful alliances I have seen is what I refer to as contractual partner alliances. From one micro business to another, it is a way to outsource work that you, as a sole proprietor, cannot offer. Some examples are Human Resources, office administration, office receptionist, and the most intriguing to me is professional service to professional service.

For example, I have seen architects align with other architects or interior designers or engineers. When a specialty is called for on a project, often you will see a Design Architect contract with a Preservation Architect, as that niche expertise is not usually staffed full time in most smaller to medium sized architecture firms.

There are many industries among Micro Businesses where this approach can garner many advantages. The benefit to the client is they do not have to engage a very large firm where all of these specialities are in house. It often helps Prime Contractors and Owners hit their MWBE percentages, if applicable. Instead of having the contracts run parallel between service providers, they can run vertical to the Prime or Owner. This allows the MWBE percentages to be met and the firms used to working with one another and with pre-established efficiencies are better able to serve the client and ultimately the project.

If you find yourself falling into the Micro Business definition, it may be to your advantage to search out strategic alliances with those service professionals or vendors that are always needed on many of your projects. A symbiotic relationship can bring new business to both participants and allow you to grow your business much faster than one job at a time and expensive advertising.

Animals in the wild often work in groups for better efficiency and to thrive. It really is no different among business owners. Identify and form alliances and achieve greater awareness and growth for your Micro Business. This is something our canine models, Dietrich and Murphy, figured out a long time ago as can be seen in the blog photo.

 Be well.