In difficult economic times, and as working practices and technology evolves, SMEs are finding that it's good to share. Michelle Henry runs HNS Signs, a signage business in Birmingham. She shares premises, staff and machinery with a printers called Genesis Display run by Steve Turrell. The arrangement has seen both businesses grow.
Henry started her business three years ago after buying cheap machinery from another signage company she worked for that stopped trading. "I was looking at all these different properties and I couldn't find anything with the roller shutting you need to have access for lorries," she says. "I was doing a job for Steve and I happened to mention that I was struggling to find new premises. He said that times were hard for them with the recession and would I like to move in with him?"
Turrell had just taken over as boss of Genesis Display and when Henry first joined him it was just the two of them in the office. "It was good we had each other because otherwise there would be no one to cover when we went out on site surveys," she says. "We know a lot about each other's business so we can answer any technical questions when we get phone calls." The agreement has worked so well that they have recently moved to a larger premises together.
As well as the premises, the two companies have trained each other on how to use the machinery that is unique to their businesses. "That's the main thing for us," adds Henry. "I know if I'm ill Steve can cover and manage my business." They also share staff during hectic periods. "If Steve's really busy he'll take one of my guys and vice versa." And staff have benefited from extra training, adding more skills to their portfolios. "The signwriters can do screenprinting and the screenprinters can do sign writing," says Henry. "It gives them a new trade and it offers more staff stability."
Turrell says that Henry's presence has helped his business with more than sharing resources. "My business was fairly stagnant when I first took it over," he says. "It was touch and go whether we'd survive. I'm pretty hopeless at networking and that's what Michelle's really good at. Having Michelle in the same unit has helped the company grow."
The only negative the two small business owners can think of is that both of their insurance costs are more than they would be if they had their own place. "We have to have separate insurance as we're two separate companies," says Henry. "Because they can't guarantee that the other company won't steal from you it makes it a little bit higher." Overall, however, they share rent, utilities bills and rates, so they get a financial saving.
Henry and Turrell were fortunate to meet each other at the right time. For businesses who might not have such lucky encounters, there are co-working spaces all over the country where companies can share office space with like-minded organisations. Many are targeted to different sectors. For example, Google funds a tech-focused co-working space in London by Old Street's "Silicon Roundabout".
A mile or two up the road in Kings Cross, the Impact Hub caters to businesses that have a social benefit.
Keith Collins, the director of a technology consultancy, has worked at Impact Hub for five years and says that without it his company Purple Vision would not have become profitable. "Working at the Hub has let us have some profits, because otherwise we'd be forking out for an office," he says. "If you have a lot of outgoings then it makes it more difficult to cope with the peaks and troughs in terms of revenue and new clients."
Collins says that new ways of working, such as sharing office space and new technology, means that starting a business today has less upfront costs associated with it. "I struggle to see how businesses like ours would have survived 10 years ago because we'd have to invest more in an office and tech," he says. "Canny startups think of flexible working spaces, think of using the cloud for their IT from the start."
Hugh Carling, director of market research platform Liveminds, says that working at the Hub has helped his business have more flexibility over staffing. "A place like this allows you to expand and contract your team when you need to," he says. "We work a lot with a network of freelancers who come in from time to time to work alongside the full-time staff."
Deesha Chandra works for the Hub. She says that as well as sharing facilities costs and not having to worry about rent negotiations and other office administration, the businesses that work together there offer each other emotional support. "You're not so isolated in your business sector," she says. "There's the opportunity to network with other businesses and share the challenges people face."
Business gurus often advise startups to be aware of rivals for customers' cash, but it is equally valuable to look for opportunities to collaborate, rather than compete, with fellow SMEs.
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