From the August 23, 2002 print edition
Ask the experts

Strength in numbers

By Mark Larsen  

While there are many advantages to being involved in a small business — being nimble, low overhead, reduced management hassle and higher margins; there are a few disadvantages. A significant challenge frequently presented is "What do you do when your client wants you to perform a job close to your core business, but beyond your firms' ability?"

The project may be too large or complex for your staff, outside of your firm's expertise or simply not of interest. If you take the work, you know that you won't perform well, thereby risking the client's future business, but if you turn them down, they will strike another vendor relationship. Either way you are out in the cold! Sound familiar? As uncomfortable as it may be, the best solution is to team with a firm better suited for the particular task.

Alliances can be formed for a particular task, multiple tasks or for a long duration on a particular type of business. Although such relationships can be with strangers, it is best to work only with quality people known through prior relationships. When the job hits trouble and everyone runs for cover, an overarching past trust will help to smooth the issues.

The key ingredient to a successful client-oriented relationship is to communicate — thoroughly, effectively and conclusively. The product of these discussions needs to be a working agreement. Don't leave anything to chance! Spell out the strengths, weaknesses and goals of each party. Who will do what? Will the client know another firm is involved? Whose name will the contract be in, theirs or yours? Who fixes what? Where does the liability lie? Who gets the credit for good work done? How will the compensation and expenses be divided? Are there any expenses that can be reimbursed? Who owns the final work product? Can either party re-sell it?

While these questions reflect a starting point for discussions, it is plain to see the level of organization necessary to satisfy the client. The initial effort is time consuming but the results are worth it.

Mark Larsen is president of Larsen Commercial Real Estate Services in Reston. Phone: 703/ 716-1000 E-mail: mlarsen@larsencommercial. com