How to win a contract with a big firm – by Emma Jones, Enterprise Nation

How to win a contract with a big firm - Emma Jones, Enterprise Nation

If you don’t already know, Emma Jones is a business expert, author, and founder of Enterprise Nation, a small business network with a community of more than 75,000. Here she talks about how small businesses can win a contract with a big firm, the advantages of doing so, and things to consider before diving in. Enjoy. And tell us about your experiences doing it in the comments.

Emma Jones, Enterprise Nation

The Queen recently announced the first ever bill with policies aimed at helping to grow small businesses – including a controversial but very necessary clause which will make big corporates publish their payment terms to small firms.

The Small Business, Enterprise and Employment Bill will make it compulsory for larger firms to be named and shamed. And the Government also plans to improve the effectiveness of its own procurement processes to help small firms through the appointment of a Cabinet-based ‘mystery shopper’ who will subject procurement authorities to scrutiny.

But how do the smallest firms win a contract with a big firm in the first place? A recent survey conducted by Enterprise Nation showed that 45 per cent of small firms are already selling products or services to firms with more than 500 employees.

What’s the advantage of working with a big firm? Well according to Lord Young, the Prime Minister’s Enterprise Adviser, it’s access to markets, reputation and capacity-building, and generally manning up. In his 2013 report Growing Your Business, Lord Young said: “A key advantage for a small firm in these relationships is access to markets. Supply chains create a way in for small businesses; they can use the opportunity to build capacity and reputation in a sector.

Research also shows improvements in productivity and performance in such firms when they work in supply chains. “They benefit from the mentoring and experience of the larger companies they work with, and the insistence on quality standards by larger businesses often improves quality in SMEs, enabling them to win contracts with other companies.”

How do you get that foot in the door? Well according to that same survey by Enterprise Nation 44 per cent of those already working with big firms said they picked up the work through a contact or someone they knew at the firm. Unless you have friends in high places, making that first contact can take time. And money.

Here are some things you should consider before you begin:

  • Do your research Study the company website and work out how you can position – or indeed adapt – your product to fit in and provide something valuable that they currently can’t.
  • Go slowly It’s not going to happen overnight. Go in with an open mind and build a relationship that could eventually blossom.
  • Stand out from the crowd Who are they currently buying from? Can you show you are better than their current suppliers? More innovative, quicker, better, faster, stronger, maybe cheaper.
  • Partner-up Can you partner up with another small firm to offer something that just isn’t out there? 86 per cent of small firms in the Enterprise Nation survey said they would consider partnering with another small firm to gain and comply with contracts. Could you do that?
  • Get certified, win awards and get some strong PR It’s hard to prove anything in this world, but going the extra mile and getting certified with a professional body and entering industry awards might help. One or two clippings might help too.

Is it worth it? Well 42 per cent of small firms in the Enterprise Nation survey said they had grown as a consequence of having to process contracts for bigger firms by between 0 and 15 per cent; 42 per cent said they had grown by 20 to 50 per cent and 16 per cent said they had grown by 50 per cent or over. So yes.

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Vicki Shiel
Editor at Moonfruit. Likes food and smoothies.

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One Response to “How to win a contract with a big firm – by Emma Jones, Enterprise Nation”

  1. Phil Evans

    Glad to see something is being done, but I’ve read through the relevant bit of the bill and I don’t see there being much scope for getting shorter payment terms?

    I was approached by a contact in a large utility company to do some work for them and had to sign up to their terms of 60 days (and the unofficial extra 30 days for general embuggerance) to actually get the work. So I knew what their terms were, but even though they had approached me there was no possibility of negotiating a shorter time frame for payment. Their attitude was very much ‘take it or leave it.’ I could have threatened them with interest on late payment (as is also my legal right) but if you do that, would you expect to get any work from them again – I don’t think so!

    I state on my fee proposals that I expect to be paid within 15 days of invoice date. Needless to say this causes a bit of a stir, but at least with some clients it means they will want to discuss it and it has resulted in a compromise between what they want and what I need.

    Perhaps there should be an effort made to have some sort of sliding scale of payment terms i.e. a piece of work less than £5k should be paid within 15 days and over £5k should be 30 days….and get rid of the nonsense of 60 plus days for any work delivered by a micro or small business.

    Cashflow is what it’s all about for a small business and we need to be able to negotiate on payment terms as well as price to stand a chance of keeping solvent.

    Now I’ve got that off my chest – well done to Emma Jones for all her efforts in helping small businesses in the UK. No one ever said it was going to be easy…or quick.

    Phil Evans
    Chief cook and bottle washer
    Green Bridge – Energy & Environmental Consultancy Services


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