A page from the corporate playbook
By James B. Webb
For the St. Louis American
The trend in contracting is for corporations to issue fewer, larger contracts, making it easier and more cost-effective to manage and track them. These bundled contracts are often out of reach of small businesses.
With most Minority Business Enterprises (MBEs) on the smaller end of the small business spectrum, MBEs face a particular challenge if they want to do business with corporate customers. However, MBEs willing to break from business as usual have some innovative options they can pursue for winning corporate business.
Taking a page from the corporate playbook, MBEs can team together to bid on contracts, mirroring the way contracts have been bundled together. The teaming arrangements can be fixed, such as the one entered into by St. Louis’ Inner Circle Logistics Inc., a MBE software firm, with three other MBE supply chain and logistics service providers, to create a full-service third-party logistics company called The WIBS Group. Alternatively, teaming arrangements can be variable, lasting the length of a single contract or working only for a single customer.
These arrangements represent a new vision for MBEs, who are more likely to be sole proprietorships than U.S. businesses overall. For the corporations that are willing to accept and encourage these relationships, they can introduce new suppliers into their value chain while not assuming the risk of working with pure start-ups. Whereas one company tends to have a single or several niches where it excels, a teaming arrangement can agglomerate companies with multiple areas of excellence so that buyers get the best of all worlds.
No doubt that this type of contracting innovation will require a change of mindset for buyers and MBE suppliers alike. However, the St. Louis Minority Business Council can help companies work on strategies to pursue teaming arrangements or contracts with teamed entities. One of the major advantages for both buyers and suppliers is the flexibility that this provides in developing beneficial contracting arrangements.
James B. Webb is president and CEO of the St. Louis Minority Business Council.