Small-business rivals find new strength in numbers

Joining forces with a competitor often takes a leap of faith, but the potential rewards of such combinations are more clients and opportunities

Collaborating with a competitor might seem risky–until you look at the big picture.

By Ann Meyer
Special to the Tribune
http://www.chicagotribune.com/business/chi-0408020063aug02,1,7936433.story?coll=chi-business-hed

In many industries, the biggest competitive threat to small businesses isn’t the mom-and-pop concern across town but the national conglomerate. By teaming up with similar small businesses, independents may be better off, experts say.

The court reporting industry, traditionally comprised of small firms serving local markets, faced consolidation several years ago as a handful of large companies began extending their reach, said Marshall Jorpeland, a spokesman for the National Court Reporters Association in Vienna, Va.

It could have been the end of many small firms. But, instead, companies like Victoria Court Reporting Service Inc. in Chicago made some changes. President and Chief Executive Victoria Rock got together with court reporting firms in other cities to create a nationwide network to rival the giants and better serve customers.

It started with "a handful of trusted colleagues" in the mid-1990s, Rock said, and has grown to about 100 small businesses throughout the nation. When a client calls her company looking for a court reporter for a deposition in Delaware, she consults an ally in that area.

"Instead of our client having to call that alliance, we handle the whole booking for them. We know what questions to ask," she said.

After the job is done, the reporter sends the transcript to Rock electronically. It’s checked for quality in Chicago.

For clients who used to ask local court reporters to travel with them to out-of-state proceedings, the approach saves money and hassle.

"It’s one-stop shopping," Rock said.

Although building and maintaining alliances takes work, Mary Piccirilli, co-owner of G&M Court Reporters Ltd. in Boston, credits the cooperation with increasing her small firm’s revenue by 25 percent.

The relationships that develop among participating companies often lead to better service.

"You get a personalized touch because we speak to each other frequently," said Piccirilli, who has worked with Rock for nearly a decade. "If she has a top client coming to Boston, I’m going to make sure I send my top reporter. It puts on a great face for Vickie."

Collaborating with other companies also works well in many other industries, noted Connie Duckworth, Lake Forest-based co-author of "The Old Girls’ Network," published in 2003 by Basic Books. But it takes a different mindset, Duckworth said, to overcome the fear of being surpassed by the competition. "To some extent, you need to look at your competitor with a slightly different eye. Are they really a competitor, or is there a way for you to each contribute" to the other?

Networking expert Lillian Bjorseth, president of Duoforce Enterprises Inc. in Lisle, also recognizes the power of alliances, even among potential competitors.

She said her company has a strong presence since it teamed up with Chicago-based ConnectWorking. The two companies put on the Great Chicago Networking Extravaganza events periodically, including one scheduled for October in Oak Brook.

Joining forces with a competitor takes a leap of faith, said Alec Ross, principal of ConnectWorking.

"If you close off that possibility, you may be closing yourself off to business opportunities," Ross said. What’s more, he said, "Nobody does exactly the same thing. Nobody approaches business exactly the same way."

Collaboration between similar companies also can prove educational. Chicago Web designers Matt Mayes and Scott Faranello met through an idea-sharing group called IdeaXchange and soon were discussing client contracts.

Exchange of ideas

"I was able to go to Scott and say, `How do you handle this?’ He showed me his contract, then I showed it to my lawyer, who spiffed it up. Now we both have a really great contract," Mayes said.

That’s just one purpose of IdeaXchange, which writer Jennifer Prokopy said she started this year partly to combat the isolation she felt as a freelancer. But the group of about 15 creative professionals also could work together as a full-service agency for clients, she said.

Experts recommend researching alliance partners before reaching out to them. Many small-business owners don’t take the time to think through what types of alliances could pay off for them, largely because they are absorbed in running their businesses, Duckworth said.

Conferences a starting point

Rock, whose 23-year-old court reporting firm has 10 employees and annual revenue of about $1.5 million, has formed many relationships by attending conferences, such as the National Court Reporters Association’s annual convention held last week in Chicago.

Before joining forces with a company, she likes to meet the principals face to face. Rock makes sure each partner has the necessary technology and experience and shares her commitment to quality.

"As an owner, if we do something wrong, the attorneys will go to the next guy," Rock said, "and we’ve got a lot of competition."

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