Business Innovation: Sharing Resources

Organizational consultant Ray Rood, a former trustee at Azusa Pacific University, told me about a business network where he was once involved.

There were several small companies who shared the costs of infrastructure, promoted each other's businesses and used each other's services. The network grew to a dozen or more companies at its peak.

There was one person who administered the network and he was the key to its success in staying together, according to Ray, who told me this a few years ago.

I believe he said the business network stayed together for more than 7 years. The reason it didn't last longer was the one who administered decided to step down and no one wanted to replace him.

This was an innovation at its time and it seems this blueprint of shared resources should be able to work well again in today's environment. I'll try to do research and see what specifics can be learned and applied.

I'm currently writing and managing projects for a web development firm which has decided to stay small yet work with a few outside contractors. Corporate clients are the focus and those of us have other projects we want to launch and clientele to serve.

How well can companies of fewer than 10 employees network together to:

share in marketing costs?
share in offering benefits to employees?
share other services like payroll and tax advice or preparation?
pay to use each other's services?
and work with each other to access corporate clients?

I'd like to know what's allowed or if such networks exist successfully.

Here's a quick overview on how a network might function.

Let's say there are 7 autonomous companies who have some of their own marketing collateral, bookkeeping and client base. But they get together and select activities they can pursue:

Building a web site together - it could be simple yet link to their own individual sites and they in turn link their own sites to each.

Direct mail campaigns together - a nicely designed postcard or letter could go to various target clients and state a "family of services."

Hiring outside consultants - they could have a once every two months session for tax advice, marketing strategies

Retirement planning - I don't know the limitations on this but perhaps have one planner who can advise on their portfolios and maybe reduce commission costs

Using a contracted consultant for HR, organizing the separate offices, writing, etc., rather than feeling alone.

Certainly, there are pitfalls but why not explore a structure to let small business owners do what they do successfully and try to leverage their relationships.

In my next post, I'll outline an idea I've had for some time on how complementary businesses can promote each other.