Why small suppliers can yield big rewards

By on May 2, 2013

 As the saying goes no one gets sacked for choosing IBM. But does that mean we should decide on the business partners and suppliers we use purely based on safety and size? Gavin Wheeler reports. 

Of course, there will always be a place for big businesses. Take some of the major hotel chains, for instance. You can be reasonably sure that you’ll get the same experience wherever you are in the world, and there’s a lot to be said for that.

But another option would be a small boutique hotel which, whilst possibly more risky, may give you a much more attentive service, with better breakfasts or nicer staff.

With this analogy in mind, here are five reasons why you should shun the big boys and pick a small firm as your supplier:

• Big companies are strong and reliable but they’re also cumbersome and can have real trouble turning things around quickly. These days speed can play a huge role in gaining competitive advantage – for instance if you spot a gap in the market, or if you can use a news event as a hook for a marketing campaign.  A smaller business is more likely to be able to help you here as they are fast, flexible and more likely to see the potential, rather than the risk, in helping with a new venture or idea.

• Within large businesses, it is inevitable that processes will have to come first – and clients have to fit around them. This is just how it has to be to make things happen, especially for global firms that need to ensure that all their offices work together effectively.  However, a smaller business can more easily put clients at the heart of their business and their processes around them. It’s about being big enough to do the job but small enough to care.

• If you want big thinking, working with a small company can make all the difference.  With fewer ‘layers’ in the business, you are more likely to work directly with the senior people in the business rather than being given the junior staff as your day-to-day contact. In marketing, it is classic for big agencies to turn up to a pitch all guns blazing with a shiny, professional pitch team that wows the client with slick presentations and senior thinkers. Once the business is in the bag, though, the pitch team is never seen again. With a small business, more often, what you see is what you get.

• You would think that there should be some economies of scale in working with a big supplier, but the reverse is often true. The simple truth is that smaller companies have lower overheads, which can give them the flexibility to offer a more competitive price. This is especially valuable when you are likely to be getting harder graft and more senior level thinking thrown in.

• When times are hard, the government sees entrepreneurship as an essential element in rebuilding the economy. Small business owners will constantly be looking at new opportunities for their clients and new ways to do business with them too. Change is constant in most industries and a small firm will be faster to react to this and drive innovation.  So, if you’re happy with the way things are, work with a large partner; but if you want to uncover new opportunities, go small every time.

 

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