SMEs are paying the price by failing to review supplier costs

  O2 X business survey reveals:

• 50% of UK SMEs do not review their suppliers against a financial threshold
• A worrying19% do not review their suppliers at all
• 60% of SMEs claim to always read to the small print, though 73% report to being adversely affected by higher costs, opt-out clause and implementation delays
• 44% of companies have never considered looking for suppliers who have specific schemes aimed at small businesses
• 37% report feeling ‘lonely and isolated’ when it comes to making key business decisions

  January 2006: Only 50% of small businesses review their suppliers on a financial basis according to new research launched by O2. The independent survey, conducted amongst 300 SMEs across the UK, also reveals that a worrying 20% do not research their suppliers at all, indicating a laissez-faire attitude amongst SMEs when it comes to reviewing their suppliers.   Results showed that although 60% of companies claim to always read the small print, 73% admit to being adversely impacted upon due to higher costs, opt-out clauses and implementation delays. This clearly shows the importance of reading the small print or selecting the right supplier to prevent difficulties or increased costs at a later stage.   Peter Rampling, Head of SME Marketing, at O2, believes: “Selecting the right supplier, financial package or new technology should not be for convenience or ease, businesses need to look at exactly what suppliers offer and measure the service and cost against a business’s own expenditure. Failing to put suppliers up for tender could mean that companies are not offered competitive prices – without checking costs, small businesses may be missing out on ways to cut costs.” Rampling continues: “When starting up your own business, it’s not just the one big idea and sheer hard work that will see your company flourish; careful business planning and keeping an eye on costs can make or break a business. It’s not surprising that a large majority of businesses are being caught out by failing to read the small print, yes we claim to read every last detail, but do we really understand what it means, especially financially?”   When commenting on the use of SME specific suppliers, 44% of respondents stated they had never used such resources tailored for the small business market. This statistic points to a potential wealth of untouched expertise and knowledge that many small businesses are failing to tap into. In fact, 37% report to feeling lonely and isolated when it comes to key decision making, highlighting the need for further support and business advice.