How Shared Services Help Entrepreneurs Build Stronger Businesses

Key Summary

• Overcoming Operational Constraints: Most small businesses lack the scale to hire full-time specialists for every administrative function, creating a need for shared service models that provide professional expertise without the high costs of in-house teams.
• Strategic Resource Leveraging: Entrepreneurs can boost efficiency and reduce costs by adopting a hybrid approach: using technology for daily tasks while outsourcing high-level needs to external experts, business support organizations, and purchasing cooperatives.
• Prioritizing Fractional Leadership: Rather than committing to expensive full-time C-suite hires, small businesses can utilize "fractional" leaders to gain high-level strategic guidance on an as-needed basis, allowing business owners to focus their limited time on core growth and customer retention.

Entrepreneurs wear many hats. In addition to serving customers, they have myriad responsibilities, including fiscal obligations, payroll and human resources, technology and infrastructure, marketing, procurement, compliance, and dozens of other administrative tasks.

For many small businesses, hiring full-time specialists in each of these disciplines isn't practical. According to the U.S. Census Bureau, over 55% of employer businesses have fewer than five employees, yet they face many of the same operational demands as larger companies.

These micro-businesses are too small to achieve economies of scale on their own. As a result, several business models have emerged to help these companies access affordable, high-quality services and expertise without having to build the capabilities in-house. Entrepreneurs can share resources, reduce costs, and access specialized support through strategic partnerships and shared service models so they can focus scarce time and resources on customer growth and retention.

Here are four practical ways to strengthen your business through shared services.

1. Use Technology to Improve Efficiency

Technology has made sophisticated business tools more accessible than ever. Platforms such as QuickBooks, Xero, Zoho One, HoneyBook, Gusto, and BambooHR help companies manage accounting, payroll, customer tracking, and day-to-day operations at a reasonable cost.

Technology, however, should be viewed as a tool rather than a replacement for professional expertise. Many owners purchase accounting software hoping it will solve their financial management challenges. It doesn't. Software organizes information, but bookkeeping, tax planning, financial reporting, and strategic financial guidance still require professional help.

Consider a five-person consulting firm that uses QuickBooks to manage invoices and expenses while relying on an outside accountant to prepare financial statements, identify tax-saving opportunities, and advise on cash flow management. This is a blend that works for most small businesses. The same applies to marketing automation software and AI-powered communications tools.

2. Explore Shared Services Through Business Support Organizations

Shared services have been used successfully by large organizations. At my prior company, Prudential, we centralized functions like accounting, HR, procurement, compliance, and IT rather than having every business unit build its own infrastructure. The goal is to perform common functions once, well, and at scale.

Many industry associations, chambers of commerce, nonprofit business support organizations, cooperative business networks, and “Main Street” business districts are now providing centralized business services that individual companies could not realistically build on their own.

According to Main Street America's 2025 Small Business Survey, More than half of Main Street businesses employ just one or two full-time employees, while over 90% employ fewer than 20 people. Those companies still require accounting, payroll, marketing, and technology support, but many don't need full-time people in every discipline.

Before going at it alone, determine whether these types of resources already exist through a local chamber of commerce, economic development organization, industry association, or business support organization.

3. Leverage Cooperative Purchasing to Reduce Costs

Insurance, technology licenses, office supplies, shipping services, payment processing, and advertising are commonly purchased independently, limiting a small company’s negotiating power and increasing administrative work.

According to the National Cooperative Business Association (NCBA CLUSA), purchasing cooperatives enable independent companies to share purchasing contracts to acquire the goods and services needed to operate their businesses. Because the cooperative is owned by its members, rather than outside investors, decisions are made in the interests of participating companies.

Consider a group of independently owned restaurants purchasing insurance or payment processing as a unit. While each restaurant remains independently owned and operated, combining purchasing power can reduce costs while simplifying vendor management. The same approach can benefit retailers, manufacturers, professional service firms, and other organizations.

Reducing operating expenses is often easier than generating additional revenue. Before renewing major vendor contracts, determine whether a chamber of commerce, industry association, purchasing cooperative, or business support organization already offers negotiated, packaged pricing.

4. Consider Fractional Leadership Before Making Your Next Full-Time, C-Suite Hire

One of the fastest-growing shared service models is fractional leadership.

Instead of hiring full-time executives, organizations share access to experienced professionals, including fractional CFOs, HR directors, CMOs, CIOs, grant writers, and procurement specialists.

A small business may need only five to ten hours per month of high-level expertise. By spreading the cost across many businesses, support organizations can deliver sophisticated capabilities at a fraction of the cost.

Consider a manufacturer preparing to expand into a new market. Hiring a full-time CFO may not make financial sense, but engaging one for several hours each month to assist with forecasting and cash flow planning may provide the guidance a business needs. The same principle applies to marketing, HR, technology, and procurement.

Fractional leadership has become a practical option for startups and small businesses that need executive-level guidance without having to hire a full-timer, which is cost-prohibitive for many companies. Research published in the Journal of Small Business and Enterprise Development concluded that fractional CFOs and controllers provide organizations with sophisticated financial leadership while offering a more cost-effective alternative to building a full-time finance function.

Shared Services Allow Companies to Focus on Growth

Organizations and communities that bundle shared back-office services, technology, marketing, purchasing, insurance, and fractional leadership create a small business operating platform that allows entrepreneurs to focus on sales, customer retention, and growth, rather than administrative duties.

Every company has different needs, and those needs change as they grow. Entrepreneurs should periodically determine which functions make sense to build internally and which can be addressed through trusted partners. Building every capability internally is not always the most efficient or cost-effective approach.

Organizations that leverage technology, shared services, cooperative purchasing, and fractional leadership can access affordable, high-quality expertise while remaining focused on serving customers and achieving their broader objectives.

Connect with an Old National Small Business Banker for more insights to help your business grow.

This article was written by Rob Falzon from Forbes and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.