General: Why large companies hire small companies

One of the best ways to grow a small business is to find something a large business needs, yet for some reason, they can’t or won’t do themselves.

This happens for many reasons:

Specialized Expertise

Small companies often have deep niche skills that the large company either doesn’t have or can’t easily build internally (e.g., a boutique AI consultancy, a specialist in SQL Server performance tuning).

These small firms might work across many clients, so they’re exposed to the latest best practices and pitfalls the big company hasn’t yet encountered. Large companies often also have marketing-driven outcomes rather than just technically-driven ones.

Speed and Agility

Small companies can pivot quickly, make decisions faster, and adapt to changes without navigating multiple layers of bureaucracy.

This makes them ideal for short-term projects, innovation pilots, or urgent fixes where speed matters more than scale.

Cost Efficiency

Building an internal capability can be expensive and slow — recruitment, onboarding, and training take time and money.

With a small company, the big company pays for results, not the long-term overhead of salaries, benefits, and facilities.

Fresh Perspective

Internal teams can get stuck in how we’ve always done things.

External smaller companies bring fresh eyes, different problem-solving approaches, and sometimes more creativity because they’re not bound by corporate culture.

Avoiding Distraction from Core Business

Large companies want to focus resources on their core revenue-generating activities.

They outsource specialized or non-core work so internal teams can keep their attention where it matters most.

Temporary or Project-Based Needs

Some initiatives only run for a few months — it’s not worth building a permanent team.

Small companies can parachute in, deliver, and move on without long-term commitments.

Lower Political & Bureaucratic Overhead

Hiring a small external firm can sometimes bypass slow-moving internal processes.

In some large companies, getting internal teams to commit time can take longer than contracting an external one.

Access to Innovation

Startups and small firms are often early adopters of new tech and aren’t afraid to experiment.

Large companies sometimes use them as innovation labs without having to take the initial risks internally.

Risk Transfer

When you contract a small company, the risk of delivery shifts to them — if they fail, they absorb some of the cost or reputational hit.

This can be safer than experimenting with internal resources.

Existing Relationships and Trust

Many small companies have personal relationships with decision-makers in big companies.

When trust and prior success exist, it’s often easier to just call the trusted small partner rather than mobilize an internal team.

2025-11-12