Page 20 - I21 Summit Magazine

widespread across sectors ranging from the grocery
and retail industries to construction, technology, and
manufacturing.
Recent studies by several lobby groups reveal that up to
20% of small businesses could be facing “pay-to-stay”
charges from corporations. Other examples of poor
payment practices included making suppliers wait up to
120 days for payment rather than the standard of 30 or
60 days. When the consumer thinks of their favorite
brands, they are unlikely to connect them with the sort
of immoral payment practices which are becoming all
too common across an increasing number of industries. Large Corporations Play a Key Role
However, whenever these examples come to light, the Major corporations spend billions of dollars annually
public shares the same sense of moral outrage as the seeking products and services from small businesses,
small fi rms that have to put up with them on a daily such as landscaping, cleaning services, logistics, soft-
basis. ware development, food services, and engineering
services. Seven in 10 small businesses increased in rev-
enue and size within two years of becoming part of the
corporate supplier base, as shown in a study of nearly
200 small U.S. businesses conducted by the Center for
an Urban Future.
When small companies interact with large corpora-
tions, these suppliers make changes that improve their
organizational structures, management practices, and
operations. These changes lead small companies to
upgrade their technologies, increase their effi ciency, and
most importantly, become fi nancially stable. As a result,
Victory Over the Villainous Plot revenue becomes greater and more consistent, making
it possible for these businesses to add new jobs. Hav-
It is imperative that small businesses learn how they
can benefi t from the commercial value of transparency. ing a large corporation as a customer also opens doors
Suppliers are often asked to divulge to large corpora- to easier credit and other business opportunities. The
tions’ fi nancial information for due diligence, compli- biggest upside is the spillover of new knowledge, inno-
vation, and growth oriented business models. When a
ance, and assurance purposes. We recommend small few small businesses improve their systems or business
businesses begin fi ghting against corporate bullying
by controlling how your fi nancials are evaluated and models, other small businesses learn from that and raise
distributed. Work with your accountant to ensure your their game to stay competitive, boosting the quality of
fi nancial statements are reviewed objectively and ac- the corporations’ entire supply chain.
curately, with clear analysis in a well-formatted report. The benefi ts of this relationship extend to large busi-
Limit the unknowns that will arise during the fi nancial nesses too. Large corporations are beginning to realize
review process and if you are a diverse small business that making small businesses true partners in their sup-
be particularly careful to ensure you are being treated plier base is more than “corporate social responsibil-
responsibly and equal to your non-diverse counter- ity” -- it is good business. Smaller companies are more
parts. The same holds true for guarding against unfair fl exible in providing innovative products and services
practices in the terms and conditions of contracts. The to meet corporate needs. They are quicker in delivering
objective for the supplier is to be transparent without services locally, which saves on costs. Their knowledge
exposing themselves to unknown risks at the hands of of local markets can be extremely valuable for corpora-
the corporation. tions trying to enter those new markets, and their em-

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