IBEX Press – Joining Forces
Joint ventures can help small businesses act like big ones
Gary A. Witte – Contributing Writer, Atlanta Business Chronicle
When you’re trying to get hired, it helps to have experience, even when that experience belongs to someone else.
When Tracey Grace, president of IBEX IT Business Experts, started her company in 2012, she already knew she would need to work with other businesses to help it succeed. She spent several years networking and getting to know others in the industry prior to opening her doors in Alpharetta.
“I basically built my entire company on partnerships,” Grace said. “For me, partnership is an inherent part of my business model.”
Several small-business owners — and, particularly, those with new businesses — said joining forces with other companies can be the primary way to become known and get work.
Jose Drapeau, senior executive of Phantom IT Consulting in Marietta, said most companies don’t want to do business with a startup.
“As you come on the scene, a lot of the companies want to work with a more established organization,” he said.
Drapeau said joint ventures can be crucial when having to meet the criteria set by companies in order to handle their projects, such as having a certain number of years of experience in a specific area. By teaming up with another company that has that experience, you can meet the requirement.
IBEX, Phantom IT Consulting and Heagney Logan Group LLC are in the process of forming a joint venture. The three companies are pooling their efforts and will be offering staffing services to the University of Massachusetts in March.
Phantom and Heagney Logan started a separate joint venture in October and will soon bid to work for a nonprofit group that aids abused children.
Ralph Williams, principal for Heagney Logan Group, said each business brings something to the partnership.
Heagney Logan would be able to manage a project, while Phantom IT has the personnel resources to execute the project. IBEX has a different tier of services, he said.
“We don’t have the same client base. We don’t have the same expertise,” Williams said. “We fit together as puzzle pieces rather than overlaying each other.”
A joint venture can be a temporary partnership or a continuing business relationship, but finding the right partner for either can be a challenge. Grace, Drapeau and Williams pointed out the importance of researching a prospective partner and determining if they share your goals.
“Don’t rush into the relationship,” Williams said. “Don’t jump at the first small engagement. Look at the long term.”
Grace said setting the terms and expectations of any agreement in writing can be critical to making it work. Financial responsibilities should be spelled out as much as possible along with how to dissolve the partnership should it go wrong. The parties should also decide on a project manager together.
“It’s important to have a strong project manager,” she said. “They’re responsible for holding people accountable for their responsibilities.”
Drapeau said in-depth research into a prospective partner company is important to make sure it meets your standards instead of just offering the missing piece to complete a deal. If the other company doesn’t deliver the needed services, it will both fail the customer and reflect badly on your business, especially if you’re the one primarily dealing with the client.
“What ends up happening is that it looks like you’re dropping the ball,” he said.
And just because a partnering company is bigger than yours doesn’t mean it will automatically meet deadlines or have crucial requirements such as proper insurance, Drapeau said.
“Sometimes those companies get a little lackadaisical about their delivery,” he said.
Grace said one can start off with small contracts with other businesses, and if those go well, then scale up into a more trusting, permanent relationship with them. She likes to make certain other companies share her ethics before partnering with them.
“For me, a partner is someone who will not just look out for their best interest, but for the best interest of the client,” Grace said.
IBEX, which speci alizes in health-care information technology issues, also plans to form a joint venture with another unidentified business to submit a proposal in January to NASA for IT services and software solutions. In addition, the company is working with still another small business to offer staffing services to a global company, she said.
“Sometimes I partner with someone smaller,” Grace said. “Sometimes I partner with someone larger. It all depends on the opportunity.”
Meeting like-minded companies with different areas of emphasis can be challenging.
Grace, Drapeau and Williams met through the Georgia Minority Supplier Development Council’s health-care consortium.
Drapeau said other organizations, such as chambers of commerce and the Technology Association of Georgia, can offer places to network with businesses and meet potential partners.
Williams said he sees a joint venture as an opportunity that helps all involved. The companies set common goals and even common budgets as they seek out business together. He said his company’s fledgling partnership with Phantom IT has already resulted in positive feedback from potential clients.
“As a small company, it helps me expand and grow,” Williams said. “I can leverage their recruiting capability as though it was my own. For a small company it is an opportunity to leverage, rather than compete.”