During team-building workshops and seminars, motivational speakers and sales trainers often quote sayings like: “None of us is as good or as strong as all of us;” or “There is no ‘I’ in team;” or “No man is an island.” Those phrases capture a common theme that “more is better.” More people. More ideas. More resources.
As it stands, minority businesses are outpacing other groups in overall business expansion and growth rates. A 2012 national survey of small business owners indicated positive post-recession growth for minority firms since 2007. Analysis by The Institute showed that African American-owned firms expanded their employee numbers at a higher rate than that of white employer firms; with white firms adding employees at a rate of 1.7 percent and black firms adding employees by 9 percent over the same period from 2007 to 2012. However, according to a recent report from the Minority Business Development Agency, that level of growth has not equitably translated into sales and revenue or job creation. For example, in the state of North Carolina, although African American businesses totaled 83,919, the average gross revenue posted was $64,614; with 5,600 employer firms and a total of 58,100 paid employees.
Thousands of minority businesses—in individual states across the country—with fewer than five employees simply don’t have the bandwidth or capacity to service a competitive marketplace that often requires a national presence, with international scale and reach. So, if there are so many capable businesses and business owners, why is the tendency toward independence and isolation—instead of teamwork and collaboration—so prevalent? There’s a lot of anecdotal evidence offering a range of explanations, and many experts have theorized on why that seems to be the case. But the reality is that coming together for the greater good is mutually beneficial and simply good business.
Here are five common solutions to galvanize businesses toward growth and to strengthen their ability to compete on a larger scale:
Collaboration – Collaboration is the process of two or more people or organizations working together to realize shared goals. Teams that work collaboratively can obtain greater resources, recognition and reward when facing competition for finite resources.
Joint Venture - A joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets.
Partnership – A partnership is an arrangement where parties, known as partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations may partner together to increase the likelihood of each achieving their mission and to amplify their reach.
Strategic Alliance – An agreement between two or more parties to pursue a set of agreed-upon objectives needed while remaining independent organizations. This form of cooperation lies between mergers and acquisitions and organic growth. Strategic alliances occur when two or more organizations join together to pursue mutual benefits.
Mergers & Acquisitions – Transactions in which the ownership of companies, other business organizations or their operating units are transferred or combined. As an aspect of strategic management, Mergers & Acquisitions can allow enterprises to grow, shrink, change the nature of their business or improve their competitive position.
From a legal point of view, a merger is a legal consolidation of two entities into one entity; whereas an acquisition occurs when one entity takes ownership of another entity's stock, equity interests or assets. From a commercial and economic point of view, both types of transactions generally result in the consolidation of assets and liabilities under one entity. [Source: Wikipedia.org]
For more information about pathways for strategic growth, visit The Institute’s website at www.TheInstituteNC.org and follow them on social media @TheInstituteNC.