Big Business: Big risk?

John Antunes
Director of SME and Channel, SAP UK and Ireland
SAP
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Small businesses are at the heart of the British economy, so it’s important for SMEs to aim high, even in an uncertain economy.  Our ‘thinkbiggrowfast’ blog advises just this; but does thinking big mean that SMEs should be targeting big businesses?

A recent article in the Telegraph got me thinking: is it better for small businesses to stick with customers and partners their own size, or aim to work with big businesses with big reputations? The journalist, Rachel Bridge, argues that businesses should stick to similar sized customers, which can grow and flourish alongside rather than working with large corporations that can “pressure and bully you on price”.

The reasons and reservations she raises are valid. Smaller companies can be seduced by the allure of a larger company, reducing their prices as a result; many large companies demand payment terms of 60-120 days which could cause real cashflow problems for SMEs; and small businesses may neglect existing customers which can easily become overshadowed by a big-name contract.

Based on this reasoning, there is definitely cause to worry about working with larger businesses.  However, I would urge SMEs not to be put off completely.  These factors are certainly areas which should be at the forefront of a small business owner’s mind when deciding whether or not to work with a big name – but as long as SMEs are astute and not blinded by the excitement of a big brand, the decision really can pay off.

After all, all big businesses started out small once, and how can you rival the big competition in your industry if you’re not working with the big players? 

As the journalist mentions – if you’re product is unique and it can’t be found elsewhere, you don’t need to be bullied into lowering your prices or meeting outrageous demands. This means that - despite your size - as long as your proposition is unique, you can take control. 

Some businesses are happy to play safe, taking a ‘one-step-at-a-time’ strategy, whereas others are happy to take that big-ticket risk.  When it comes to business, there is no steadfast rule as to what is right and wrong and that is exactly why I would advise businesses not to feel scared to think big when deciding who to partner and work with.  You should never feel cornered into an agreement which doesn’t benefit your business; but with the right contract in place, working with that big brand could be the best decision you ever made.  

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