The National Audit Office recently said that the UK government must do more to help small firms, claiming that the government must unify its support schemes to help tackle a potential £22bn funding gap. However it isn't just the government who need to do more, big businesses must support smaller firms during their pitch processes. It is inherently in their best interest to do so, yet many firms typically invite larger businesses to participate in the tender process, meaning they might be missing out on the best ideas, which could be offered up by smaller firms.
Unfortunately it is all too common that small businesses aren't on a level playing field when pitching for business from larger firms. According to independent research by blur Group, the majority of contracts are awarded to service providers with existing relationships rather than the best ideas.
Smaller firms can face trouble whilst trying to convince big businesses to give them a chance to participate in the tender process to begin with. Many small business owners found the opportunity to work with large organisations was limited due to the size of their own business, regardless of whether they offered the best service or not.
Also even if they are given the opportunity to pitch, it doesn't necessarily mean they are in with a chance of winning the contract - nine out of ten small businesses surveyed admitted they had participated in new business tenders where they stood 'no chance of winning' as the client had a clear favourite from the outset.
Of course, smaller businesses don't have the same resources as larger firms, meaning that tender processes run by large firms that can often take weeks, even months, can put undue strain on them that can be unsustainable. They do not have the ability to dedicate the time and resources required throughout this process, especially compared to larger competitors who have dedicated new business teams capable of working exclusively on tender processes for weeks at a time.
Whilst this does raise the question of why small businesses bother to pitch for these contracts to begin with, any entrepreneur knows that declining the opportunity to pitch for a contract that can profoundly change a business' trajectory is an unbelievably difficult thing to do. Small businesses shouldn't have to limit their ambitions, rather larger businesses must take a look at the way they undertake new business tenders.
Bigger businesses need to consider what the impact might be if they continually go back to the same service providers. These outdated business processes are quite possibly leading to some of the best ideas going unheard. They must free themselves from this tyranny of tradition that currently exists and offer a more fair pitching process that gives smaller firms the opportunity to participate.
Technology is definitely starting to help create a fairer environment. The recent growth of s-commerce (or services commerce) is providing a new streamlined way for businesses to buy, manage and pay for their core services via an online platform. This ensures the best ideas shine through regardless of the provider, meaning that the most suitable company is selected rather than one that happens to have an existing relationship.
With 89% of decision makers in large businesses believing there are better service providers available than their existing network and most wanting to find a provider offering a more innovative and fresh approach there is definitely an appetite for change.
Small businesses are the lifeblood of the UK economy, change needs to come and it needs to come quickly. Big businesses must embrace new approaches to the pitch process, this will give them access to a wider pool of talent who can offer truly innovative approaches that create real value for both firms and the economy as a whole.