Subscribe to Entrepreneur for $5
Subscribe

Competing on a National Scale

What to consider before you do business with large corporations

Opinions expressed by Entrepreneur contributors are their own.

Q:Before your company grew to have a national presence, how were youable to successfully persuade large corporations that your offeringwas competitive with larger, national competitors? Some companiestend to relegate companies like ours to the "minoritysubcontractor" category.

A: Aswe all move toward becoming bigger businesses, we must first acceptthe need to add technology so that our partners, customers andsometimes even our employees can gain easy access to ourservices.

To compete with big companies, we have to be where companiesneed us to be, when they need us. That doesn't necessarily meanhaving hundreds of offices, but it does mean implementing thetechnology so you can have a virtual presence anywhere worldwide.Many large corporations demand this sort of technology from theirsuppliers. In fact, they may even require you to implement VirtualPrivate Network (VPN) technology, to participate in ane-marketplace or to comply with their own technology platform sothat you can communicate electronically with them on their ownterms. Is it worth it to implement technology and change how you dobusiness just to accommodate one or two clients? If those fewclients represent most of your business, then the answer is yes.The first step toward growth then is to have the technologicalcapabilities that your larger customers will require of you, or athave least the willingness to implement them when they becomenecessary.

The other major factor in growing to accommodate larger clientshas little to do with technology. Oftentimes, businessrelationships with large clients are built on networking andface-to-face conversations. Get out of the office as much aspossible. Join business groups and associations. Talk to existingclients. Some of them may have relationships with the largercompanies you wish to target, and they may even be willing tofacilitate an introduction.

But before seeking out relationships with larger corporateclients, you need to consider whether you really want to dobusiness with them or not. It may seem obvious, but the decision totake on a large client must be carefully considered, and you mustlook at whether your business is ready at this time to address theunique problems and issues that will come up when dealing with thistype of client. To be sure, having a few Fortune 500 clients inyour stable does bring advantages. But also be aware that yourmargin will become much lower with these clients. Largercorporations want to leverage their size to get the best pricingpossible. Besides offering them pricing based on razor-thin profitmargins, you may also have to implement specific technology justfor the purpose of doing business with this one client, often atyour own expense. You may need to hire extra staff, and you mayeven need to send staff members to the client site for an extendedperiod of time.

In positioning myself to handle larger contracts, I also triedto surround myself with knowledgeable and well-connectedindividuals as much as possible. Building a business is not a soleeffort, and it takes a team of dedicated people who share yourvision. I've grown my company with the help of four familymembers who had already been in the business world, so theyunderstood how these large corporations work. Having this help andinsight was of tremendous value to me, and it would have taken memuch longer to achieve my goals had they not been there for me.

Janice Bryant Howroyd is founder, chairman and CEO ofTorrance, California-based ACT-1 Group, the largest womanminority-owned employment agency in the United States, with morethan 70 offices, 300 full-time employees, 65,000 temporary"stars" and annual revenues exceeding $500 million.Founded in 1978 around Howroyd's personal philosophy of"Keeping the Humanity in Human Resources," ACT-1 is todaya multidivision conglomerate serving such clients as Ford MotorCo., Gap Inc. and Sempra Energy and meeting demands forwell-educated and well-trained temporary, full-time and contractemployees. She has twice been honored by the Star Group as one of50 Leading Woman Entrepreneurs of the World.


The opinions expressed in this column are thoseof the author, not of Entrepreneur.com. All answers are intended tobe general in nature, without regard to specific geographical areasor circumstances, and should only be relied upon after consultingan appropriate expert, such as an attorney oraccountant.

Entrepreneur Editors' Picks