The Power of Three: How big business could join government to support small companies
10 March 2014 4:27am
IF I received a pound for every time a chief executive of a large firm said to me “we’d like to be the champions of small business”, I’d be comfortably off. However, over the past year, I’ve seen an increasing number of businesses not only voicing this statement, but acting on it.
This is a welcome trend. EY’s latest G20 Entrepreneurship Barometer focuses on The Power of Three, a vision of government, entrepreneurs and corporations working together to create and sustain entrepreneurial economies. A few big corporates are now stepping up to support small companies, while acting like the entrepreneurial ventures they seek to champion. They are aware of the role they must play in ensuring the small business sector continues to thrive.
In the wake of the devastating recent floods, for example, Vodafone agreed to donate 1,000 dongles to small businesses that lost broadband and Royal Mail agreed to deliver them. Regus opened its 220 UK centres to offer workspace to those affected; Citrix offered a free deal on its GoTo Meeting product, so small businesses could stay in touch with customers. Constant Contact did the same.
The Enterprise Nation marketplace – a single source for small businesses to find professional advisers – would not have been possible without the support of eight top brands: Toshiba, Regus, Sage, Simply Business, Citrix, Constant Contact, EDF Energy and Vodafone. They have provided the funds to build it, and have used their promotional reach to communicate the project to over 1m customers.
This shows the art of what’s possible. To go even further, there are five areas, with proven best practice, that the government should celebrate and encourage others to replicate.
First is finance. Fujitsu supports its small business suppliers by providing them with access to supply chain finance, with many suppliers getting paid as quickly as 10 days after submission of their invoice. This generates goodwill and helps small firms in Fujitsu’s supply chain to manage their all-important cashflow.
Second, big corporates should engage with small businesses to cultivate and invest in new ideas. Aviva, for instance, is partnering with the fintech community to host a hackathon to develop innovative ideas for the insurance industry, with the potential for entrepreneurs to have their ideas backed by a partner with deep pockets and market share. At The Bakery London, startups apply to become part of an accelerator and the chance to test their ideas via brands like Heinz, BMW and Stella Artois. They offer access to customers, and creative and marketing know-how.
Third, opening up supply chains to small companies has great potential. Sainsbury’s and John Lewis have seen the fruits of this over the past year, and others are launching competitions and hosting events to be pitched to by young companies with bright ideas and viable products.
Fourth, if there is one asset big businesses have, it’s people – and lots of them. Big firms should make their talent available for practical help. Lloyds has committed to training at least 400 volunteer enterprise mentors from its workforce to support new and established small businesses.
Finally, training and resources. Asos has opened up its customer base via the Asos marketplace, and hosts workshops to give fashion businesses the tips and tools they need to make the most of the opportunity. Facebook is offering a 28-day programme with support on how to use this powerful social media platform for business. Dell is providing two businesses free space in its offices, with access to all support services.
With a growing market of 4.9m small businesses, supporting smaller firms can lead to an increase in sales and profits – owners are more likely to buy from brands that understand and engage with them most. Another upside is a more entrepreneurial workforce, delivering higher returns and customer service. UCL’s professor Tomas Chamorro-Premuzic has shown that encouraging an entrepreneurial spirit among staff is vital to keeping companies dynamic.
Yet despite these benefits, too many big firms talk a good game but don’t do much to back it up. Bureaucracy makes them slow to move. We need more champions; more big businesses that see the value in engaging with small companies and turning their insights into action. It’s time all big businesses act – profits, shareholders, customers and employees will all benefit. And so will Britain’s small businesses.
Emma Jones is founder of Enterprise Nation. This is an extract from An Entrepreneurs' Manifesto – a new publication from The Entrepreneurs Network, launched tomorrow in the House of Lords.
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