Think Tank: SMEs should stick to customers their own size
“It is very easy to be seduced by a large company – you feel you have made it
and moved on to a bigger stage. But it is better to walk away with your head
held high, than to be driven out of business because you have been forced
into a situation where you have had to accept lower and lower costs.”
Caro is one of the lucky ones – his firm supplies a niche product, which makes
it hard for big firms to simply go elsewhere, and easier for him to resist
their more outrageous demands.
Even if you manage to nail a price, the next challenge is delivering the
contract – long before you have been paid for it. With increasing numbers of
large corporates demanding payment terms of 60, 90 or even 120 days, an SME
needs access to serious amounts of working capital to keep the wheels
turning until payday.
Worse, there is no guarantee the terms and conditions agreed at the start will
stay that way – several large firms have recently committed the sin of
unilaterally altering terms and conditions in their favour, part way through
a contract. For a small supplier with
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