How teaming helped a small startup win big deals
As a laborer with Ironworkers Local 40 in New York City, Marc Alleyne made a good living on major construction projects at World Trade Center, Battery Park City, and Madison Square Garden. But after a 250-pound steel beam crushed his leg in 2011, he got to thinking about getting into a new line of work.
In May 2012, after a nine-month recovery from his injury, Alleyne started a demolition company in Rosedale, NY, and quickly won a $99,000 contract to contribute to the renovation of a City University of New York library. Progressively bigger contracts have followed for his six-person firm. He expects his take-home pay this year to be between five and six times his former union wages.
Alleyne says he named his company Spartan Demolition for the Greek warriors with determination to surmount all obstacles. But he attributes his rapid rise to partnerships with larger companies.
“The key to success really has been teaming,” he says. “A lot of these jobs require bonds that small businesses can’t afford or can’t get. The insurance requirements for large projects are extremely expensive, so it’s imperative that we partner.”
When Alleyne decided to start his own company, he looked into programs that New York City and State offered for small business owners. He enrolled in and graduated from a 5-month construction management program offered by the New York State Small Business Development Center at York College.
And he discovered the American Express OPEN Forum’s Victory in Procurement program. One of their NYC Teaming classes taught Alleyne how to make a 30-second elevator pitch, and gave him the chance to present it to city agencies at a matchmaking event. There, he exchanged cards with a general contractor who was planning to bid the library renovation job. Spartan won the subcontract to demolish the existing structure.
Since then, he says, “I’m constantly networking and calling other contractors. I go onto the General Contractors Association website and call all their members and ask if they have any jobs.”
American Express OPEN advisor and teaming expert Denise Rodriguez Lopez was the featured speaker at a recent teaming workshop hosted by American Express and the NYC Department of Small Business Services. “Teaming is a strategy for success by increasing the opportunities that are available to small businesses,” Lopez says. “You create more opportunity by increasing your capabilities and capacity.”
Lopez notes that while teaming—or banding together with fellow small business owners as equals to pursue larger contracts than any could compete for alone—is a newer strategy, small businesses can also benefit from forming partnerships, joint ventures, or mentor-protégé arrangements. Subcontracting, whereby a prime contractor extends its bonding capacity to a subcontractor, is the best way for businesses like Alleyne’s to break into government procurement, she says.
“You acquire experience, you get a chance to see how the game is played without having that responsibility, and you’re acquiring past performance”—a crucial factor government agencies look for when hiring contractors, she says. “You can be an engineer with 35 years of experience, but if you’ve just started your own company, you don’t have that ‘past performance’ the government is looking for. The easiest way to acquire it is as a subcontractor,” she says.
Lopez adds that being successful in one contract opens doors for others, as Alleyne can attest. American Express reports that nearly one-quarter of active small firm contractors say they have gotten other subcontracting opportunities after being recommended by a previous contractor. “The government—be it municipal, city, or federal—likes to buy things from people they know and trust,” Lopez says. “As soon as you’ve fulfilled a contract successfully, you’ll see it opens doors for you."
How does Alleyne like all the new doors he’s going through as an owner and a subcontractor? “It’s very different.” As an ironworker, he says, “you know you only have to concentrate on work and Friday your check is going to be there. It’s not like that as the owner. Sometimes on the job you have to get your hands dirty, but you’re also thinking about bids, your insurance that’s due, and the next job. If you’re out there working, there’s something not getting done. You get burned out really quick.”
No matter, he says, “I don’t think I would go back to working for someone else. Being a business owner, you have a sense that your future is in your hands: What you gain is reflective of how hard you network and bid jobs.”
Plus, he says, “I’m only 27, I like the competition and the chase.”