Big Business Pipeline for Small business

Reuters:

With President Obama’s small business bill stalled in Congress, big business is trying to pick up the slack.

Six of America’s largest corporations – IBM, AT&T, Bank of America, Citigroup, Pfizer and UPS – have banded together to create a “one-stop shop” for small and mid-sized businesses looking to sell to them and take advantage of the nearly $150 billion awarded collectively in contracts each year.

“We figured the major way that large companies could affect growth in small or medium-sized enterprises is through our supply chain spending,” said Stanley Litow, IBM’s VP of Corporate Citizenship & Corporate Affairs, who started the process of developing a Web-based platform where small businesses could apply for contracts two months ago.

Litow said the website – Supplier Connection (www.supplier-connection.net) – won’t launch until next year, but the hope is it will streamline the application process in the same way the NCAA’s Universal College Application allows students to apply to multiple universities at once.

“It’s one-stop shopping,” said Litow, adding the service will be free to applying small businesses and the participating large corporations. “When a small business goes onto Supplier Connection they qualify or become a supplier for the six companies starting this. Hopefully over the longterm hundreds of large companies will come in with billions and billions of dollars worth of spending and make it easier for small businesses to jumpstart themselves.”

The project is backed up by a small study released last week by the New York-based Center for Urban Future that found very few small businesses are suppliers to the country’s largest companies and that helping increase that number would help boost overall economic growth.

“In many cases small businesses are turned off from even applying because of the daunting application process and how time consuming it is,” said Jonathan Bowles, Director of the Center for Urban Future, who added the study also found that small and mid-sized businesses that were able to secure contracts with a Fortune 500 company often doubled their revenues. “We think it (Supplier Connection) could have a real serious impact on small businesses and the economy overall.”

One such business is Thinkso Creative, a small New York marketing firm that caters to small businesses. Amanda Neville, a partner at Thinkso, said her 10-person firm landed a large client during its first year of operation that allowed it to stabilize cashflow and hire more staff.

“We know what a huge impact it can have,” said Neville, adding the process of getting your company on a supplier list can take a long time, especially when each company has a slightly different form to fill out.  Whereas if you have one standardized form it’s actually comforting to know that it has probably been vetted by all the companies that are using it and it gives it a more streamlined approach.”

Dick Griffin, a federal contracting expert who runs his own Arlington, Virginia-based consultancy firm The Griffin Method, said anything that helps small businesses get more access to large corporations is a positive, but it still doesn’t ensure a face-to-face meeting.

“This is going to be a great way for people to find other people to talk to and I think in that sense it’s very good, but it also is going to be a great way for large businesses to screen rapidly that 80 percent of those people they don’t want to talk to,” said Griffin, who added it would likely be a mixed blessing in that sense. “I work with lots of small businesses who try to get in to see those big companies all the time and getting through that filter at the gate is just tough and this might be one way to step around that barrier.”

Links:

Associated Press: IBM to help small businesses compete for contracts with blue chip companies
http://www.google.com/hostednews/ap/article/ALeqM5gngCBNgMrMr0xA3d4f1XxqsAj3jQD9I7PHPO0

CNN Money: Big biz moves to help small biz
http://money.cnn.com/2010/09/14/smallbusiness/IBM_small_business_contracts/index.htm

Bloomberg: IBM, Citigroup, AT&T to Start Website for Potential Suppliers
http://www.bloomberg.com/news/2010-09-14/ibm-citigroup-at-t-to-start-website-for-potential-suppliers.html

Crains NY: Corporations urged to give small businesses a hand
http://www.crainsnewyork.com/article/20100914/SMALLBIZ/100919932#

WRAL: IBM to help small businesses compete for contracts
http://www.wral.com/business/story/8288334/

BtoB Magazine: Consortium led by IBM introduces small-business supplier program
http://www.btobonline.com/article/20100914/FREE/100919946/consortium-led-by-ibm-introduces-small-business-supplier-program

Sun Solara: Smaller Businesses Getting a Boost from the Big Corporations
http://solariasun.com/smaller-businesses-getting-a-boost-from-the-big-corporations/446.html

IT Pro Portal: IBM Introduces Small Business Supplier Program
http://www.itproportal.com/portal/news/article/2010/9/15/ibm-introduces-small-business-supplier-program/#ixzz0zc7kKGii

Who said supply chains are boring?: $10M Grant Creates New Portal for Small Businesses to Sell to Large Businesses
http://supplychainsrock.blogspot.com/2010/09/10m-grant-creates-new-portal-for-small.html

Video of Supplier Connection
http://www.youtube.com/user/citizenIBM?feature=mhum

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One Response to Big Business Pipeline for Small business

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