As the world becomes smaller or "flat" to use the current jargon, it is becoming increasingly important for smaller companies to collaborate and work together.

The ability to be agile, to be nimble, has long been a core advantage of smaller companies. Yet this advantage is off-set by having a smaller sales team, limited marketing budgets and a smaller employee base.

Jane Gertner, an advisor with the Ontario-based innovation centre ventureLAB, explains that we are seeing the globalization of niche markets. Depending on the nature of your business, you may be missing out if you are not planning how you can expand your market beyond your local borders to reach the one billion person customer base that the web has made a reality.

The solution is to explore new business models and to find ways to do more with less.

This is where collaboration and strategic alliances can become a powerful market advantage. We are now competing in a world where our competitors are no longer just local businesses, but can be located anywhere in the world.

In a previous article on CanadaOne, Larry Dotson highlighted the advantages strategic alliances can generate. The key advantages of strategic alliances is that they:

• Help you tap and expand into a larger a customer base;
• Enable you to offer a larger variety of products and services while providing more upsell options to existing customers;
• Enhance your credibility through endorsements from your partners;
• Distribute sales and marketing costs, enabling you and your alliance partners to do more at a lower cost individually;
• Broaden your understanding of how you can better serve your customers and solve their problems, because you will have a larger customers service base as well as insights from your alliance partners about what you could be doing better;
• Help your business expand faster, both in terms of developing new products and services and through more rapid customer acquisition;
• Give you access to a larger employee base, which both expands your sales and marketing team and also gives you access to people with different skills and insights; and
• Expand your creative and strategic thinking resources, pooling talent and allowing both businesses to come up with profitable business ideas faster than before.

Strategic alliances and collaborative partnerships can be formed with local companies, but you may opt to select partners based on other competencies than just geography. Online tools have made it easier for us to work with anyone, anywhere, any time or day of the week. They are also well suited to companies that want to take a "lean start-up" approach to how they develop new products and services.

When considering how to move forward, ask yourself this: What might you lose if you continue to do business as you have always done? And what will be the impact on your business if one of your competitors, rather than you, forges a strong strategic alliance to leverage the many advantages outlined above?

As technology transforms the world of business, collaboration and strategic alliances are a core business model shift that Canadian companies can't afford to ignore.