Smaller Suppliers Can Offer Unique Advantages
Although large companies often look to other large companies to procure goods and services, a growing desire to diversify the supply chain is prompting many organizations to cast a wider net.
As a small business owner, you can bring unique benefits to multinational corporations, such as greater flexibility, streamlined processes, more personal service and creative ideas that come from offering a different perspective. If you purchase on behalf of a large company, connecting with diverse small businesses can give you access to those unique advantages.
The logic of diversity
Nearly all top U.S. corporations now have supplier diversity goals and a report from Bain & Company found that spending on diverse suppliers rose more than 50% from 2017 to 2020.
Motivation to diversify the supply chain can stem from a company’s commitment to increasing diversity and representation in all aspects of the organization, a greater understanding of the bottom-line impact of diverse input, or simply a desire to minimize the risk of supply chain disruption with an expanded network. Research shows that companies that lead in supplier diversity tend to have more efficient procurement processes overall and a higher annual supplier retention rate.
The global COVID-19 pandemic has also illustrated many of the risks of focusing the supply chain on a few very large, low-cost vendors. Companies with such consolidated supply chains found themselves more vulnerable to disruption than those with a more local and diverse network of suppliers.
The power of smaller
Here are just some of the characteristics that can help you make the case that smaller is often better.
As a small business owner, you bring a level of adaptability to business that huge multinationals just can’t match. You still call the shots so you can make decisions, authorize changes and implement new policies without a long and slow corporate approval process. That means far quicker attention to hiccups and the flexibility to tackle smaller jobs that many large providers won’t.
- Efficiency and cost-effectiveness
With less red tape to navigate, your small business can prioritize a customer’s order and get it from point A to point B without a lot of wasted downtime. Without bulky corporate headquarters and extensive staff, you may also offer comparable, or even lower, price points.
- Personal service
Your business is an extension of you and you care in a way that is difficult to replicate among employees in large organizations. On your own, or with a small team, you can offer customers the unique advantage of talking to the “boss” and key decision makers. Company contacts appreciate the time savings and results of dealing directly with someone who has the power to address issues and look out for their interests.
As an expert in your field, you can also serve as a critical resource to company contacts and procurement professionals who may rely on you for advice and suggestions, helping you forge a closer, more personal and ongoing business relationship.
Being close to your customers helps drive insights that can enable you to spot unmet needs and develop new approaches to address them. Research even shows that working within resource constraints (typical of start-ups and small businesses) frees people to be more creative problem-solvers. When you see a customer struggling with an ongoing issue, or learn about their expansion into a new area, you can jump on the opportunity to serve them in novel ways that deepen your partnership.
The support to succeed
Our Global Supplier Diversity Conference (GSDC) can help you gain the tools and understanding needed to tap into the growing demand for diverse suppliers in corporate America. By investing just one day in this virtual program from the convenience of your home or office, you will tap into the extensive knowledge of senior corporate executives from Microsoft, Porsche, the Atlanta Hawks, GSK, the Small Business Administration and others, as well as small business owners who know how to navigate the procurement process.
GSDC provides the strategic framework to help women and underrepresented business owners identify and prepare to secure VC funding and corporate contracts, while connecting founders and business owners to those opportunities. Our goal is to boost spending with minority- and women-owned businesses, launch new vendor partnerships and increase the number of successful underrepresented small business suppliers. We look forward to seeing you there. REGISTRATION is now open and attendance is free.