13 August 2008 | Paul Snell
More than half of buyers think small firms are less competitive than large ones.
According to research carried out by BT Business and Cisco, 52 per cent of 253 procurement managers from UK businesses surveyed thought SMEs offered less competitive rates than their larger counterparts. Some 41 per cent of buyers also think small firms are less creative.
It also revealed 40 per cent of buyers were less likely to choose a small supplier while times are tough, with 42 per cent selecting a large vendor, because they are seen as a safer option.
This is despite the fact that most respondents thought small businesses offered a more personalised service and better chemistry to create a smoother relationship.
"These findings are extremely worrying for UK businesses and especially start-ups," said John Dunsmure, managing director of the British Chambers of Commerce. "As such I would urge businesses to outsource anything that is secondary to their core business competence and invest their precious resources in what will help set them apart from the competition."
The Federation of Small Businesses this week submitted its response to the Glover Review, which is looking at how to reduce barriers for SMEs to win government contracts (Web news, 17 June). Recommendations include a guaranteed three-week period for SMEs to respond to tenders and breaking larger contracts into lots.