Playing with the Big Boys Small and large businesses find they can work together for mutual benefit
By Kate Leibsle When you are a small business owner, there are a variety of ways you can grow your business: have multiple locations, increase traffic flow or, as many Kansas City small businesses do, become a vendor or preferred partner of a larger company. Large companies can’t do everything for themselves; they need paper, office equipment, personnel and professional services, such as advertising and public relations.
But how does a small business get noticed by the right person in a large corporate structure with layers of processes and paperwork?
First, it is important to know what the procedure for obtaining vendors is at a target company. When she founded her staffing company, Bartunek Technology Group, in 1989, Jeri Bartunek said she often signed contracts with large companies just by knowing or meeting the right person. She had a knack for finding the decision-maker.
“I got into big companies initially with phone calls, offering a product that was highly specialized,” she said. “It was possible then to make a phone call, and have someone say, ‘Tell me what you do; send me some information.’ In some cases, it was almost an accident.”
On one occasion, running from floor to floor in an office building, Bartunek literally ran into someone who would years later help her get work with what would become Bank of America.
She would go on to work with MasterCard because of someone she knew from Bank of America who took her for lunch to introduce her to the MasterCard decision maker. Process and Procedure Today, though, most large companies, such as Hallmark Cards or Sprint Corp., have procedures in place to help streamline their procurement and supplier streams.
At Sprint, becoming a vendor starts with giving the company information through its Web site portal and ends with patience, said Brian Meadows, senior vice president for supply chain management.
At the Web site, companies are asked to send information about themselves, their finances and anything else that might help Sprint make a decision about their viability as a vendor. That information is reviewed by the supply chain team and then sent on to various sourcing teams. Then the need for patience begins, Meadows said.
“That’s what I counsel people on the most,” he said. “It’s about building relationships. It takes patience and perseverance.” Certify Yourself One criterion many companies consider when looking for small business vendors is whether the company is certified as either minority- or woman-owned. It’s the first question Mary Shannon asks about a company in her role as Hallmark Cards’ supplier diversity manager.
Hallmark has a presence at three trade shows a year that focus on diversity: one each at the local, regional and national levels, she said. Additionally, suppliers can go online and send Hallmark business profile information about their companies to be considered as vendors.
Not being certified doesn’t eliminate a company from Hallmark’s consideration. Shannon’s, responsibility is to work with internal departments to develop business relationships with minority and women suppliers and likewise.
Hallmark’s procurement teams don’t totally focus on size when deciding if a business can work with Hallmark. Choosing a vendor is all about what need Hallmark has and who can fill it.
“It’s not about size,” Shannon said. “It’s about ‘Do they have the breadth we might need? Will they offer quality customer service? Are they stable? Who else (large companies) are on their client list?’” Location It’s fair to wonder if local big businesses prefer to work with local small businesses. Again, it depends what the need is, Shannon said. About 45 percent of Hallmark’s minority and woman-owned suppliers are locally based. Sometimes, it just makes sense to choose a local vendor.
“In the public relations department, when we were needing a hosting/development company for our online newsroom, we did choose a local company,” said Linda Odell, Hallmark spokesperson. “We wanted someone more likely to be able to meet with us face-to-face.” Size Perception It can be difficult to get a big company to take a chance on a smaller one being able to deliver goods or services, said Chance Goldston, chief creative officer and owner of HOTMETAL Creative, an advertising/branding/design company.
“My ultimate goal was to increase the dollar value per client that I was making,” he said. For Goldston, that meant working with larger companies.
“But the perception can be that because you’re small, you aren’t necessarily able to handle the workload. A lot of times they look to larger firms to handle the heavy lifting. It can be difficult to convince them that you can provide them with the same service.”
And staffing that growth can be another challenge. Do you ramp up your staff and then go after the big contracts or do you get the big contracts and then hire?
Goldston said he’s been living on the “get the contract and then hire” track, but is shifting to hiring people first, so he can better answer the inevitable question of how many people work for HOTMETAL.
Bartunek knows firsthand about the problem of perception. She’d worked for quite a while with MasterCard, when the credit card company decided it wanted to have a single source provider for its staffing needs. They requested bids for the job, but the company didn’t even ask Bartunek for a proposal.
“They didn’t think of us as big enough to provide what they needed,” she said. “But we could have done it. We could have forged a strategic alliance with a New York firm to meet their needs.” Partner Up One of the ways Goldston would like to grow his relationships with larger clients is through partnerships. He admits, however, that at times, it seems as though big companies are hesitant to work with smaller companies who have partners for a project.
“I think it’s a perception of stability,” he said. “And ease; they want just one point-of-contact. The more seamless it is to the client, the higher their comfort level.”
To that end, Goldston has begun bringing partners in under his name. His most recent joint venture is with MMG Worldwide.
MMG Worldwide is one of the world’s largest travel and tourism agencies. MMG/Mix, of which Goldston is majority owner, will allow the companies to work together to offer clients industry-specific expertise and urban insights to deliver effective, highly targeted multicultural marketing programs. Already the two companies have worked together on increasing multicultural tourism for the Missouri Department of Tourism and Kansas City’s 18th and Vine Jazz District. Relationship Building Once a small business has established itself with a larger one, what are the keys to maintaining and growing the business? Aside from some of the obvious: being reliable, offering excellent customer service and working with integrity, Meadows said business owners have to really believe in their service and value what they do. Staying focused on what they do well is also key.
Meadows said his job is to create opportunities for Sprint and other companies. “I enjoy finding new companies for us,” he said.
While it may seem elementary, companies that try to be something they’re not or provide a service that lies outside of their core capabilities won’t go far. Still, that doesn’t mean companies shouldn’t move beyond their initial contacted scope of work. Adding value once you learn about a big company is important to keeping a contract and becoming more ingrained in the business.
“To the extent that you want to grow your relationship with the big business,” Meadows said, “you have to understand what is the focus of your business. I’ve seen a lot of companies come in with proposal ‘A’ and then they want to do proposal ‘C;’ but they don’t really have that capability. You need to extend your business thoughtfully.”
Goldston said he has learned to turn away business that doesn’t fit what his company is about.
“In the beginning you do anything,” he said. “But as you grow and evolve, you learn what’s a good fit—when to turn things down.
“A big company can put a lot of time behind meetings, lunches, doing RFPs. As a small business, when you spend time and effort on proposals, it can really wreck havoc on you if nothing happens.” Beneficial Partnership Still, even with the uphill battle, working together can be beneficial for both small and large companies.
“We enjoy finding new small companies to work with,” Meadows said about Sprint. “Small businesses are more nimble, they can focus on and create a better value proposition oftentimes.”
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