Partner Article

Why SMEs need the support of big business like never before

SMEs are facing the worst crisis in living memory as a result of COVID 19. Many of us have lived through previous recessions, but generally they impact us slowly and in those circumstances it was possible to think and plan ahead to deal with challenges from staff numbers to cashflow.

Unlike in other eras, this crisis has come from nowhere and meant that economic activity has literally ceased overnight with small businesses seeing revenues disappearing, whether you are a business that is consumer facing or one that sells to other businesses. The Government certainly has unveiled some eye-catching measures including the furlough scheme, Coronavirus Business Interruption Loan Scheme and Future Fund for startups raising investment. However, it is ultimately businesses operating with each other and with the public that will see us return to growth.

While it may have been used to talk about the previous recession the phrase ‘we are all in this together’ rings truer now than it has in the past. With business survival for all of us at stake it is vital that all businesses work together for the common good. Previous competition between businesses seems irrelevant, when we are seeing the fraying of the very fabric of the business ecosystem.

This system is the lifeline that supports everyone’s livelihoods and enables peoples’ families to be fed. In the past there has been more of a David and Goliath relationship between small and big business. These smaller players might be scared to ask for help or argue with big business for fear of losing a contract. However, we are in a new ballgame now.

After all bigger companies have more support and deeper pockets to be able to weather the storm. Some like Diageo have behaved impeccably. Diageo recently announced a $1million pot to help its on-trade customers through these difficult times, so it is absolutely possible for big business to put people before profit.

However many others are pulling deals, campaigns, delaying payment and reneging previously agreed contracts at a stroke. SMEs need to take a stand and urge bigger businesses to employ more flexibility in their thinking. For example, if big businesses want to stop contracts overnight, push them with alternative solutions like scaling down spend slowly rather than switching it off immediately or paying a proportion of fees for their next project.

It’s tough but you need to keep at it. Keep working with them on a solution that works for them and you. After all they also have a moral duty and it’s incumbent on them to do their bit to support you.

Ultimately if unscrupulous organisations turn their back on their responsibilities and suppliers they need to be called out. The mood music has changed and the public as consumers are going to have less tolerance for organisations not doing what is right. Government also has a role in setting the parameters, if they are being asked to step in and support then we need to see big business playing ball to support us. The country’s economic future could depend on it.

By Daniel Todaro, Managing Director, Gekko

This was posted in Bdaily's Members' News section by Gekko .