Nine reasons to consider contracting with an SME

Phil Machin
2 May 2014

2 May 2014 | Phil Machin

Phil Machin is managing director at Bridge ProcurementFor those working in a large organisations, before finalising your due diligence and opting to present the 'safe' option to your stakeholders, have you considered the benefits of working with an SME?

• The SME is creative, nimble, innovative, reactive, accepting, forgiving, motivated by success, and most of all personal.

• For those considering purchasing consultancy from an SME you are typically assured well-educated, experienced consultants that have already worked in blue-chip consultancies and many other businesses large and small, rather than those just exposed to clients through a blue-chip consultancy, and costing far more.

• Your business will be gold dust to the SME – their managing director will want to be in the loop from the start, ensuring you are a happy client from the outset.

• The SME recognises the importance of client retention and the cost of winning a new client is considerably higher than providing some extra 'loyalty' concessions to retain their prompt paying clients.

• When finalising a deal you will be able to overcome the typical commercial and contractual hurdles much quicker compared to engaging with a blue-chip supplier. The boss will be on hand to personally approve reasonable changes rather than the many approval levels required to finalise and sign contracts within the blue-chip.

• The SME maintains a tight rein on their operating costs, keeping them low to offer competitive pricing to win more clients, whereas the blue-chip has substantial operating costs to build into their pricing.

• Rather than dealing with the various layers of salesmanship to secure the best price with the blue-chip, the managing director will often conduct client negotiations on behalf of their business.

• Think bigger than the supplier risk credit report. SME’s take time to build financial stability – the reality is that a deeper, less scientific analysis should undertaken to assess risk based on the type of service or goods required and the industry sector of the supplier. Think about how risk can be mitigated and help the SME understand what is required to overcome the risk obstacles.

• Last point that we must all remember - the business you currently work for was an SME once upon a time, so think about the many other benefits that can be realised from working with the SME.

☛ Phil Machin is director at Bridge Procurement

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