Around the World To expand your presence, get together--through a consortium.
By Gail Dutton
Opinions expressed by Entrepreneur contributors are their own.
If you need a global presence but can't open offices everywhere, one solution is to join a global consortium. That way, you can maintain your boutique atmosphere and also compete with large multinationals by accessing the services and expertise of consortium members throughout the world.
"There are three reasons to be in a consortium or strategic alliance: to sell more, deliver more and develop your company," says management consultant and coach Andy Birol, founder of Birol Growth Consulting Inc.
Developing his company was the attraction for Scott Hanson, 46, president of HMA Public Relations and a founder of Public Relations Global Network, an affiliation of 50 small PR offices throughout the world. He leverages the experiences and insights of PR firms like his own, "picking their brains through e-mail and annual meetings." That gives him broader insights for his local work and results in more business when partners' clients expand into his region or need his expertise for projects. "That's tremendously valuable," Hanson says, and it contributes to his 2008 projected sales of $1.6 million.
For Cookie Anne McIntyre, 51, founder of Powell, Ohio-based executive search firm The McIntyre Company, the focus was on selling and delivering more. "Extending our global capability was part of our strategic plan because of the demand for senior execs for U.S. companies abroad," she says. Opening an international office with her staff of five was impractical, so she joined Penrhyn International, a 42-country consortium of executive search firms. McIntyre now hopes to work with global partners in ways that "allow us to compete with multinational search firms and have more involvement with our current clients internationally." She expects her pre-Penrhyn revenue of $1.5 million to grow to about $2 million in 2008. Consortium membership "also enhances domestic credibility," she says, by allowing her to present her company as a full-service international firm.
Financial arrangements vary by consortium. At Penrhyn, revenue from an assignment is divided, with "a percentage going to the party that uncovered the opportunity, a percentage to the one that conducts the search and a percentage to Penrhyn," McIntyre explains.
National and regional business associations, technology incubators and local industry clusters are all good sources for finding (or starting) consortiums. To be successful, Birol says, companies should focus on consortia that have a track record of actually increasing revenue for their members. "The key to a successful consortium is to make sure it's fortifying your best and highest use," Birol emphasizes. "The benefits of a consortium are only as good as the best firm, so if it's just average, watch out."
Gail Dutton is a freelance writer in Montesano, Washington, specializing in business and technology.
