For a small business, winning work from one of the big boys can mark a landmark in the life of an entrepreneur – but for many it’s becoming a millstone rather than a milestone.I was reading last week that there is a “crisis of trust” in big business among small and medium-sized enterprises (SMEs), much of which is caused by aggressive late payment practices. According to a survey of 4,000 UK SMEs by the Forum of Private Business, more than half have experienced significant problems with late payment and 46 per cent feel powerless to negotiate supplier terms. In addition, 70 per cent stated that behavioural late payment is a problem. In every walk of life there is a food chain based on size, and business is no different. Big companies are the lions of the economic savanna. Obviously, there’s no chance the gazelles will form a supplier agreement with the king of the jungle, but big companies do prowl the business world with arrogance, which can make small enterprises a next meal. Big business has always dictated the rules of the game and is not averse to
taking its ball home if things aren’t going its way. And SMEs are stood like kids in the playground hoping to be picked for the big company’s supply chain team. This power makes it very easy for big business to make life difficult for small firms. The same poll by the Forum of Private Business highlighted this with nearly half of the SMEs questioned revealing that big companies are not interested in fostering long-term relationships or negotiating payment terms. For some small firms, this is an alien concept and hard to deal with. Most will have employed the SME mentality of growing their businesses by establishing strong relationships with customers and suppliers for mutually-beneficial results. Suddenly they are in the corporate bear pit where the only winner is the big beast and its shareholders.
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Entrepreneurial businesses working together are the future of the economy. After all, there are 5.2m SMEs and many are keen to trade with each other. Image: Shutterstock
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