Savvy entrepreneurs tapping risk

-- Deborah Cohen covers small business for Reuters.com. She can be reached at smallbusinessbigissues@yahoo.com --

By Deborah L. Cohen
CHICAGO (Reuters.com) - Cari Sommer and Lauren Porat are matchmakers of a sort. The thirtysomethings also are among a group of savvy entrepreneurs who see small businesses as a big opportunity.
"With the economy doing what it's doing, there are a lot of people looking for work and a lot of small businesses looking to get more efficient," says Porat, a former investment banker whose site launched in February. "That notion has been absolutely validated by the traction we've gotten."
Their online start-up, Urban Interns LLC, matches a talent pool of job-hungry students, actors, freelancers and others in the New York area looking for part-time work with small companies seeking flexible staffing options.
Using advanced search filters, employers use the service to identify candidates interested in helping with a wide range of jobs, including professional tasks such as scheduling and administrative support to personal assistant duties like shopping, organizing and running errands. They can also post specific jobs and call for applicants.
Urban Interns is just one of several emerging concepts attempting to tap the needs of small to mid-sized companies whose tolerance for risk has diminished with the worsening recession and for whom keeping costs at bay has become a matter of survival.
"Screaming needs increase during times like this," says Rich Sloan, co-founder of Startupnation.com, an online support community for entrepreneurs. Sloan notes the preponderance of solutions "that address urgent needs" of small businesses, including re-examining how precious cash is being allocated.
Companies like Rural American Onshore Sourcing Inc. are betting that these needs will become more acute as the global economy worsens.
The Cincinnati-based startup founded by Christopher Hytry Derrington is taking a different spin on staffing needs, offering small- to mid-sized firms an alternative to overseas outsourcing of high-skilled jobs such as information technology and marketing. It is matching those companies up with home-based workers in third-tier U.S. cities and rural areas whose hourly rate is considerably lower than their counterparts in major U.S. markets.
"If you're a mid-sized Chicago architecture firm, you can't outsource," says Derrington, who launched his company in August and says business is brisk. "Large companies have more resources to throw at it."
Even though American workers in outlying areas might still be more costly than those in outsourcing hotspots like Bangalore, India, smaller companies that opt for Derrington's service don't have to worry about installing overseas managers to supervise their work. In addition, they and their customers have the benefit of relying on workers in similar time zones.
"The labor costs in India are increasing," notes Derrington. "We have talented people in rural areas and we match them up with (companies) that want to save."
Cost containment startups extend well beyond the realm of human resources; they include technology-oriented businesses such as Israel-based CTERA Networks, which is launching a service to provide so-called cloud-based network storage for smaller companies. Cloud technology allows for offsite data storage on a remote network server, freeing a company of the costly investment in network infrastructure.
"If you own equipment, scaling down is very expensive," says CTERA Chief Executive Liran Eschel of the needs of small companies to adjust their resources quickly as demand shifts. "But if you buy Cloud (storage), scaling down is very easy. You spend as you go."
CTERA's product was introduced in January; the company, which has funding from Benchmark Capital, is now developing partnerships with service providers and expects to be available in the market later this year, says Eschel.
Suresh Pothiraj, who formerly sold financial services for news and information provider Bloomberg LP, believes he has come up with a novel solution for companies to reduce the risk associated with supply chain management.
His newly launched venture, Service Options Exchange LLC, or SOPTEX, takes a financial trader's approach to procurement: it offers options on the materials that companies purchase in large supplies, not unlike those available in the commodities markets.
By buying an option for paper products, for instance, a company can protect itself if its primary supplier fails to deliver. And for a vendor, the exchange offers the ability to raise much needed capital from pre-qualified buyers at a time when credit is tight.
Whether or not the idea will catch on remains to be seen; as of now Pothiraj is still hunting for users, offering free membership to those companies and suppliers willing to give his service a try. Eventually he plans to make money by charging for the listings and offering additional services such as helping buyers find new suppliers when they have tapped out their own resources and those of the SOPTEX exchange.
"Projects are getting bigger and pieces of projects are getting bigger too," says Pothiraj, who officially launched two weeks ago. "We reduce the risk."