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Corporations should work with early-stage startups: It is advantageous in many ways

Large corporations are often in need of partners who will help them in their business endeavours. These partners could be people like vendors, suppliers and other business entities who will facilitate the business process of the bigger commercial brands. In recent times, a new business idea has surfaced that speaks about larger companies with an established identity to work with smaller startup companies who have just begun their journey in the market. This idea has gained huge popularity and acceptance in the market. Several companies across the industries have taken up this practice. This business structure has several advantages. This is a business structure that provides many opportunities for both large companies and also smaller business entities.

Benefits for the Startup Companies

According to the experts smaller startups that have just begun their journey never operates with full potential. In fact, they use 40-50% of their operational capacity. This means, there remains a huge scope of development and bringing changes wherever required. This room for improvement is the space where the larger companies or the bigger partners can help the smaller startups to improve their standard of operations as a whole. The smaller startups are often much eager and excited to know the various ways through which they can improve their business operations and can improve on the quality of their products and services and hence this is the place where they can get a lot of help from the large and the established companies.

On the other hand, this is an advantage for larger companies. This offers the larger companies to control their startup vendors to a great extent. This makes the process of doing business much easier for bigger companies. Controlling larger vendors is often not all that easy as they themselves are quite established brands and are not ready to mend their ways all the time the way it is being proposed by the bigger partners.


Eager to please as the bigger partner can bring bigger business for the startup vendors

Startup companies have just begun their journey in the market. They will always be in dearth of the right kind of clients, the right kind of references which can build their reputation and can help them to get better business in the future. Association with a large business partner is a kind of reputation boost for them. Such associations will mean a tidy amount of revenue on a regular basis and also the addition of a huge name to their new portfolio. These are some of the reasons why we see that startup vendors always treat their larger business partners with a lot of importance and seriousness. They are eager to please their big client and keep them happy all the time. This is why you can get great services out of them and hence working and doing business becomes a lot easier. This might not be the case with established vendors.

Edge over Competitors

Association with a large client is one of the most favourable things to happen to a startup company. This is a development that puts the name of the startup company, which so far was quite anonymous in the market suddenly comes into the limelight. Suddenly the startup companies have something that the market reckons and hence they too emerge as a player in the market. This is one of the steps that put them into a prominent light and also gives them an advantage over their competitors.

When speaking about the larger companies it is also clear to many that these larger vendors are suppliers that work with a large number of larger companies in their market. Hence the elements that the larger brands receive do not give them an advantage in business. Hence working with a startup vendor might even prove to be beneficial for the bigger brand.


Access to the Entrepreneurs

It has been seen that the entrepreneurs or the owners of the startup companies meet and stays in contact with their bigger brands clients. This can prove to be a huge advantage for the bigger brands. When working with more established vendors, often the client company interacts with the employees of the supplier company. In this case, in case some extra services are required or an urgent change in the regular protocol is required, getting the same done y the vendors becomes a time taking process. This is because even the employees of the vendor companies need to get the permission and the approval of their business heads. However, this is not the case with smaller startup vendor companies, as in this case the owners and the entrepreneurs are in direct contact with the bigger clients.


Economic Contracts

The aspect of pricing is one of the bigger benefits and advantages that the larger brands can enjoy at the time of working with the smaller and startup vendors. This is one of the biggest reasons why bigger companies are often induced to work with startup vendors. The margin of cost is a huge one when the prices of a larger vendor are compared to the smaller ones. This can bring a huge benefit to the bigger companies and their profit margin increases by a huge amount. In this context, we see that often the bigger clients and also make pertinent changes in the contract clauses when they are working with smaller vendors. This ensures that although the interest of the smaller vendors is not hurt in any way the same brings larger benefits for the company as a whole.


Lean Management

The smaller startup vendor companies have real lean and flexible management. They can make changes in their policies, procedures, and rules in a quick and effective manner. This is one of the aspects that provide the bigger companies with much-needed flexibility and agility. This can be a huge plus point in business and can make working much easier, simpler and faster for the larger companies. Yet again it has been seen that other forms of vices such as office and company politics are quite missing in the smaller companies as they are induced to work and give nothing but their best to their clients for more and better business.


Working with such small startup companies and vendors is yet again a proposition that will come with its own deficits. Often it has been seen that the required set of skills and experiences are often missing with such companies. This can pose a challenge for bigger client companies. In the case of the bigger and the more established vendors, it has been seen that they happen to be much knowledgeable and experienced in their job and they can handle any and every form of situation. However, this is not the case with smaller vendor companies. In such a situation it is always advisable that you run a pilot project with them where you give them a limited bulk of business to handle. It is during this time that you need to assess their strengths and shortcomings. A detailed report must be given to them regarding the improvements and the improvisations that are expected from them in the future. This is one of the best ways through which the startup companies can work on their quality and efficiency and can prove to be better business partners in the future.

Rahul Krishna

Rahul is a serial entrepreneur has two decades of experience in hiring competent workforce globally. Trying to solve a business problem for startups and young Entrepreneurs by a Coworking Model - Empowerers Coworking City. He is passionate about developing ideas which carry an impact, building human relationships & inspiring people to do amazing things.

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