Has a prospective client ever said your small business was too limited to serve their needs? Does your small business lack expertise in critical areas? Well, there’s a way to add skills, size, and strength without hiring a single employee. Join with others to form a “virtual company.”
What’s a virtual company? It’s an alliance of independent entrepreneurs and outsourced contractors who come together to work as one entity. They can unite on an ongoing basis to appear like a business, or they can coalesce for just one or two projects.
For instance, I’ve seen a marketing “company” list on its website under “The Team” an impressive group: marketers, public relations professionals, social media specialists, graphic designers. It seems like a full-service marketing company. If you look closely, however, you’ll notice that only two team members are actually employed by the company. The two company founders clearly formed an alliance with other specialists.
Now, the marketing company isn’t trying to be deceptive. Below the name of each team member is printed the name of their own individual businesses. Nevertheless, by listing these experts together as a team, the marketing firm creates a positive impression and offers clients a full range of marketing services.
There are no rules on forming a virtual company. The “company” can be the creation of one person who hires others as subcontractors, or it can be an alliance of equals who market together. One member of the “company” can do most of the marketing, own the client relationships and bill for all services, or each professional can bill and collect from clients separately.
But remember, virtual companies are not legal entities. You’re not forming a real corporation. The idea is to come together as needed on different projects to meet client’s needs.
Creating a virtual company enables you to:
* Offer clients a wider range of services. You probably excel in one or two capabilities, but you’re not able to serve all your client’s needs. By offering a team of specialists, you’re more likely to get—and keep—a client’s business.
* Do more effective—and less expensive—marketing. You can combine marketing lists, create combined marketing materials and campaigns, and reach a larger pool of potential clients. And, if amenable to all, you can split the costs.
* Reduce clients’ apprehension. Many clients are reluctant to hire one-person or very small companies. They’re fearful that they could be stranded if something happens to the one key person.
* Present a more impressive image. Together with your alliance partners, you’re going to have a longer list of former clients, a broader range of experience, awards, and other references than you would have on your own.
* Work with great people. If you choose partners well, you’ll get the chance to work with people you respect, enjoy, and can learn from.
One of the biggest barriers to putting together a virtual company is recognizing you may have to give up some part of a client’s business to someone else. Are you willing to get a small piece of a big pie rather than all of a very small pie—or no pie at all?
Let’s say you’re a really good graphic designer who specializes in designing websites. You can also do some basic web programming, enough to get a client up-and-running. But you can’t take on big web projects and you’re limited in the scope of technical functions you can offer. By joining together with more skilled website programmers to form a virtual company, you’re far more competitive when making proposals to prospective clients, especially bigger, more lucrative, customers.
You’ll most likely identify potential members of your virtual company by networking with other local entrepreneurs through industry associations and entrepreneurial organizations. If you need additional help, you might find outsourced providers through freelance companies like Upwork, freelancer, or guru.
When putting together a virtual company, look for partners who balance your skills and maintain your level of quality work. Make sure everyone is clear about the relationship: who owns the customer, who bills, who is responsible for expenses and paperwork.
Remember, you can’t do everything yourself. As the saying goes, “The whole is greater than the sum of its parts.”
Copyright, Rhonda Abrams, 2016
This article originally ran in USA Today on January 29, 2016
Commit Yourself to the Turn
