Texas entrepreneur Diva Garza knows that if you slam a door in the face of opportunity, it's not likely to knock again. So when she was approached by a much larger competitor about teaming up as a subcontractor on a project, she pushed aside her reservations and signed on.
"I was pleasantly surprised," remembers the owner of International Team Consultant Inc. Personnel Services. "It turned out to be a great relationship. I found out that when you team up with a competitor, particularly a larger one, there has to be mutual respect, lots of trust and good chemistry."
Garza's decision to join forces with Kelly Temporaries three years ago helped her establish a relationship with a Fortune 500 corporation--Shell Oil Co.--to which she had been trying to sell for almost five years. As the Houston business owner learned, subcontracting and selling to private companies offer lucrative opportunities for small businesses seeking to expand their customer base.
The line between selling and subcontracting is a fine one. Selling directly to corporations as a supplier or vendor typically involves either a onetime sale or an ongoing relationship where goods can be exchanged at any time. Subcontracting usually involves working for a specified time with a company that has a contract for a specific project. Suppliers can easily become subcontractors, and vice versa. What makes both relationships so valuable is that they allow you to get your foot in the door with not only that corporation but also other large companies it does business with.
But before you race down to the nearest big company, there are a few things you should know--not the least of which is the sometimes confusing terminology. Companies selling to big corporations could be called vendors, suppliers or strategic partners; the departments you'll need to contact may be called supplier diversity, supplier development, purchasing, materials management, supplier or supply management, and even sourcing.
Another thing to keep in mind is big corporations are downsizing--not just employees but suppliers and subcontractors as well. "We've been working for the last three to four years on reducing our supplier base," says William Blue, manager of the Supplier Diversity Program at Dupont. In today's marketplace, winning a coveted subcontract or supplier contract with a corporation means you have to work that much harder.