The current economic downturn is a challenge for the most capable of developed countries more so for developing countries like Saint Lucia. In addition, this global crisis further exacerbate the many social and financial strains hence places more pressure on developing nations.

The small and micro business sector serves as an engine of economic activity for developing countries in particular.   However they rarely have the capacity to survive such shocks due to lack of technical and operational capabilities.  As the effects deepen, many small businesses collapsed and the mortality rate is expected to continue to rise.  It begs the curious question - must a small business become victim of this current economy?

Despite this harsh reality, the current global situation presents opportunities for small businesses to thrive. As larger businesses collapse, the gaps in the marketplace to provide products and services increases.  It is therefore necessary for the enthusiastic entrepreneur to conduct an environmental scan to determine what opportunities exist and capitalize on them accordingly.

One of the strategies that can be explored is the establishment of strategic alliances alternatively referred to as business links or network linkages.   A network linkage is a formal and mutually agreed upon collaboration between businesses, where "partners" pool, exchange or integrate specific resources for mutual gain, yet in most circumstances, remain as separate businesses/entities.  A network linkage can take the form of an informal collaboration; a strategic partnership or a joint venture - these allow for greater autonomy or a merger which promotes greater integration of the entities.

This approach presents tremendous opportunities for entrepreneurs to enter new markets, undertake joint training, share business costs, and implement best practices, to name a few.  The limited resources and capabilities of the micro and small entrepreneur serve as the greatest motivator to engage in network linkages.

Network linkages have successfully been used by more established businesses to gain a competitive advantage. The effective use of strategic connections requires a new mindset towards competition and proper management of the relationships established. Many businesses may overlook an association, as businesses of similar kind are perceived as competitors.  It is therefore necessary to look at what is mutually beneficial and how to collaborate to achieve market success. The banks and car dealerships or insurance companies for instance have used network linkages to take advantage of market opportunities.

These collaborations are smart and effective methods of developing a small business. This affiliation can be used to enhance competitiveness and operational sustainability. To successfully use the strategic alliance the micro and small entrepreneur must have the right approach.

The Small Enterprise Development Unit (SEDU) within the Ministry of Commerce, Industry and Consumer Affairs has developed a training programme designed to specifically equip micro and small operators with the necessary tools and skill set to start and manage a strategic alliance or network linkage. 

Imagine the possibility of a barber being equipped with the strategic alliance skills.  He can manage and entire wedding event by engaging all the necessary service providers in a strategic alliance just from starting a conversation with the groom - his client. He can accomplish the same over a wide geographic area given the state of the information highway today.  The possibilities are endless if he manages the network linkages effectively.

For more information on how to start and manage a strategic alliance or network linkage, please contact SEDU at 468-4223 or 453-2891.

Perle M. Alcindor, BSc. PMP

Business Development Officer

Small Enterprise Development Unit

Ministry of Commerce, Industry and Consumer Affairs

4^th Floor Heraldine Rock, Building

Waterfront, Castries