Unlikely partnerships with big businesses help small businesses thrive
LM Otero, Associated Press
NEW YORK — When Psyche Terry's lingerie business needed a lift, she got it from a retailing giant.
Terry started Urban Intimates, a lingerie line for curvy women, in 2009. At first, its lacy bras and panties were sold only on the company's website. She wanted to get them into stores.
A small business association told her about The Workshop at Macy's, a training program that teaches women and minority entrepreneurs how to get their products into major retail stores.
Terry, who lives in Dallas, took the weeklong course in New York in 2011. The yellow, green and animal print lingerie had to go, Macy's told her. Shoppers preferred them in red, black and pink.
Other changes were made to the business, and last year, Macy's, one of the nation's largest department stores, started selling Urban Intimates at 10 of its stores in California, Georgia, Maryland, South Carolina, Texas and Virginia. Another department store, J.C. Penney, began selling the line on its website around the same time. Sales jumped 700 percent in 2013 from the year before and are expected to grow again this year. Without the Macy's program Terry says, "I'd still be a little dot-comer.
"It's definitely life changing," says Terry. "They really held my hand through the entire process."
Unlikely pairings of large and small companies are making a difference for small businesses. Small companies often struggle with a lack of funding and little experience running a business. About half fail within the first five years. Some large companies are coming to the rescue providing mentorship, formal instruction and cash in the form of loans or prizes to help give small companies a leg up.
For the big companies it's not just about being nice. Giving back can polish their reputations and may even boost profits. People are more likely to support a company they know is giving back to the community, says Scott Davis, chief growth officer of brand and marketing company Prophet. Working with smaller companies also exposes the big brand to the customers of the small business, says Davis. The entrepreneurs are likely to talk to their customers about a company that helped them when they were starting out.
"Storytelling is such a big part of brand building today," says Davis.
There's more. Some say working with small businesses inspires their own employees and helps them attract and retain top talent. It can even help them identify hot products.
More than 60 businesses have been through The Workshop at Macy's since it launched in 2010. Small businesses accepted into the program have no obligation to work with the retailer in the future, but a few, like Urban Intimates, have. The program gives Macy's access to new products to sell.
"We're looking for the next great thing," says Shawn Outler, a vice president at the company.
LIGHTING A PATH
Investment bank Goldman Sachs helped Ryan Walsh see his electrical company's future. Walsh, who took over New York-based Walsh Electrical Contracting from his father, was accepted into the Goldman Sachs 10,000 Small Businesses program, which provides a free business course, spread out over several weeks, for entrepreneurs. Walsh says it forced him to come up with a 5-year plan for the business.
Another benefit is networking. One business owner in the class hired Walsh's company to install lights and electrical equipment. Walsh paid another classmate to redesign his company's website, brochures and business cards. And a restaurant owner from his class now caters Walsh's lunch meetings and even his child's christening.
"You meet some good people," he says.