Wednesday, July 8, 2009

Bank on Opportunities from Big Firms

Advice for small companies from a highly successful entrepreneur who started from scratch

Jim Estill started EMJ Data Systems 30 years ago from the trunk of his car. After several other ventures EMJ reached the $350 million figure in sales and sold it 5 years ago to his current company, SYNNEX, which has earned $2 billion in revenue.

His myriad experience with businesses of different sizes informs his opinion that big companies' reactions to the recession can open up some possibilities for your small business. Here are some of these ideas:

Find a Newly Empty Niche

When big companies want to cut down on costs, they might decide to leave a type of business with a high cost structure that they believe can't earn enough in the current economy. But if you have low overhead, that type of business could work well for your small business.

But how do you find such a niche? Find the former customers and recently unemployed staff of a company who has done this. The customers might likely need a new supplier and the staff needs jobs. Or you could go to the larger company itself and they might want to give you a good deal on the sale of their related assets because they want to quit that line of business so badly.

Provide Outsourcing

As larger companies cut down on their in-house staff, they will realize they still need essential things done so they will hire an outside company to do those same jobs (like accounting, janitorial, etc).

Sometimes when managers are asked to downsize they will cut down on other parts of the budget and continue to spend on those areas needed. Might not be such a smart idea but they do it and it's something you can profit from.

Get the Best Minds on Your Side

It is now far easier than it was to hire the most qualified people. As those top people get laid off from bigger companies they would be willing to take a cut in their usual pay as well as do part-time and/or consulting work for a smaller company like you.

Undercut Them

Now many companies will want a lower-end alternative to supply their business services that they normally would pay more for. This could get you more accounts as the bigger companies try to cut costs.

Take Risks

There are some markets that the big companies would normally enter were we not in this recession but they are not willing to take the necessary risk to make any big or sudden changes in direction right now. You, as a smaller company can afford more risk when there is a lot less competition in new areas.

Make Deals

Since we are in a credit crunch, so to speak, many businesses are in need of cash but now you can barter for things that you would otherwise have to buy.

Now, if companies have surpluses you can take off their hands you can make a deal with them to get it cheaper or trade it for something you have that they want.

Jim Estill is CEO of SYNNEX Canada Ltd., a computer-equipment wholesaler based in Guelph, Ont. His popular CEO Blog: Time Leadership is at

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