Bronwyn Reid, Director of Small Company, Big Business is an author, speaker, regional small business owner and entrepreneur with over 25 years experience, University Lecturer and small business advocate. She has authored two books: Small Company, Big Business, and Amazon #1 Best Seller Small Company, Big Crisis.
The focus of Bronwyn’s company and first book – Small Company, Big Business is helping small business owners prepare for doing business with large organisations. She describes the essential steps businesses should take to attract and retain big business and Government as clients, a milestone that for many small businesses is the launch pad to significant growth and longevity.
Bronwyn is passionate about simplifying procurement processes to enable small businesses to participate in large supply chains, and ensure they get paid on time.
Tell us about evolving from a small business owner to a small business advocate.
Evolving is the correct term! It certainly wasn’t planned.
My heritage is small business for many generations so it’s no surprise that we finished up setting up our own. I also have a regional background, so I understand how critical SMEs are to regional economies. In regional areas, the local economy is often dominated by one industry with a few big participants – or even a single company. Therefore, the dynamics of the relationship between small and big businesses is an important economic success factor. But far too often, B2B finishes up being Big Business to Big Business (or Big Business to Government), and SMEs do not get a fair chance at participating in their supply chains.
As a small business supplying to big organisations ourselves, we realised just how much the power relationship was weighted against us. I wrote my first book and set out to get more SMEs into supply relationships with their big compatriots.
That was in 2017. Little did I know then that supply chains worldwide would shatter because they relied so heavily on international movement, with local, smaller suppliers left out. The COVID-19 Pandemic showed us all just how fragile and risky our reliance on big companies in supply chains is.
How can small businesses be more prepared to deal with disasters like COVID, fires and floods?
One of the reasons that big businesses give for not engaging with SMEs as suppliers is that small business is ‘risky’. They might go out of business. And that certainly is true, so SMEs who want to be successful suppliers to big organisations must prepare themselves to face inevitable business crises. We know the next one will be coming, we’re just not sure when. It may be a flood, fire, cyclone or pandemic, or an employee leaving, a cyber attack, a divorce – or any one of a thousand crises that could threaten the life of a business.
The problem is that so many don’t prepare. There are some very simply steps that any SME owner or manager can take to prepare for and respond to a crisis, and then be in a position to take advantage of the equally inevitable recovery.
The basic preparation plan involves seriously considering the things that could go wrong, what would happen if it did go wrong, how you could stop them from happening (or make the impact less), and most importantly, what to do if the worst does happen. With even a basic plan, you will not be caught like a rabbit in the headlights – frozen in fear and not knowing what to do.
Many will recognise this as a simple Risk Management process, and that’s exactly what it is. However, the risk management ‘índustry’ has made it all seem so complex, that most SME owners run a mile when Risk Management Planning is mentioned. We need to decomplexify, and help SME owners to protect their business, their family and themselves is a very complex world.
What is your advice to large organisations and Government bodies who want to work more with small businesses?
- Pay your bills on time.
- Reduce your payment times.
- Recognise the value of local and small suppliers. When SE Queensland and Northern NSW flooded in February 2022, the supermarkets quickly ran out of food. Independent and small retailers sourcing local supplied did not.
- Recognise that supporting small suppliers is actually good for the Australian economy – both nationally and locally. It’s not just about buying from local/small suppliers, it’s about engaging them and investing in them to extend the capabilities they can provide to your business.
- Don’t change the rules of supply engagement every other Friday over afternoon tea. SME owners accept that rules are necessary, but constant changes are a burden.
- SMEs DO care about safety. Safety measures that keep people and property safe are embraced. What does make them upset however is compliance for the sake of compliance, that doesn’t actually improve safety for everyone.
- Consider your insurance requirements. Does a small supplier really need the same insurance as a multi-million dollar building company?
- Consider your tender documents. Again, does an SME need to complete the same documents as a huge contractor?
- Pay your bills on time.
- Be aware of your own large suppliers. Can you require them to include smaller companies in their supply chains as well?
- Be proactive in supporting your small suppliers. They are innovative and agile, and can provide you with a competitive advantage.
- Be aware that the way you treat your small suppliers is being watched by your shareholders, big suppliers, and customers.
- Did I mention reduce your payment times, and pay your bills on time?
What are the big changes for business coming out of the COVID disruption?
The main consequence of COVID-19 has been to expose cracks in our society and institutions. Where weaknesses existed previously, the strains of the pandemic have blown those cracks apart so those shortcomings are now clearly visible. These are three of the big changes I see emerging.
The rise of business with purpose
The way corporations engage with society is one of those cracks. There is a shift from business for profit to business for purpose. Almost 60 years ago, the economist Milton Friedman told his readers that:
“there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits …”
This line of thought has dominated since. But that is changing. People are now looking for businesses with purpose – those with a strong, believable “why” that has a positive impact upon society. It is no longer sufficient to have some nice-sounding words on the boardroom wall, website and annual reports. Today’s customers and investors have a laser-like vision and can see through a thin veneer of words.
There were companies that did not exactly act with honour during the COVID-19 pandemic. We noticed. Similarly, many companies behaved badly during previous crises. Then there are those that behave badly most of the time. All these companies are on consumers’ and financier’s watchlists.
Restructuring supply chains
As I mentioned earlier, big business often sees SMEs as too risky to have in their supply chains. In the search for efficiency and risk reduction, supply chains got longer and more complex as one big company would purchase from one, or several, other big companies over a great distance – both in time and kilometres. China, became the “world’s factory”.
COVID-19 exposed the real risk. The flow of goods and people stopped. All of a sudden, the world was clanging with the sound of breaking supply chains.
Those big companies will now examine their supply chains for the failure and/or choke points.
Here are the main responses that I anticipate from them.
- Stop relying on just one country, or one company for supply.
- Look again at manufacturing in their own country or region. Local (as in within Australia) manufacturing has a whole new appeal.
- Focus more on buying local. Something as simple as border closures have highlighted the attraction of local companies as suppliers.
- Seek out new technologies such as blockchain that will make supply chains much more transparent.
Trust is now the currency of success
This trend is linked to the rise of the business with purpose. We now live in a world of distrust. Government used to be the most trusted institution, but is now distrusted, viewed as incompetent, and seen as divisive by almost 1 out of 2 of us. The media is seen as a source of fake news and division. Neither Government nor the media are seen as either trustworthy or competent.
It is hard to imagine how we can operate a stable, functioning society and economy with this level of distrust.
Not surprisingly, people are looking elsewhere for stability, and they are looking at business. Business is trusted and seen as more competent than Government, the Media and NGOs. Most trusted of all is “My employer”. Trust is local.
With these other institutions vacating the trust sphere, all stakeholders are looking to business – particularly small and family businesses – to help find solutions to our social issues.
What does that mean to business owners and managers?
- Have purpose and social engagement at the core of their strategy.
- Work on de-carbonising the economy and fixing inequality.
- Form partnerships to leverage action and impact.
- Do not follow Government and the Media down the track of irresponsible communication.
- Increased focus and pressure on business leadership.
ABOUT FEMECONOMY
You are the female economy. Whether you are a female consumer, business owner or a woman in the workforce, you can create gender equality by choosing female led brands.
Small Company, Big Business is a Femeconomy Platinum Member. To learn more about joining Femeconomy, hit the big red button below:
