Are big businesses damaging growth of smaller firms?
Small businesses in the UK have claimed that bigger firms are placing them under extreme financial pressure, a major new poll has revealed.
The Forum of Private Business survey results added that spiralling business costs, overpowering red tape and bullying tactics from larger firms were all disrupting SME growth.
More than 4,000 small businesses were questioned and 47% suggested larger business partners had no interest in developing long term relationships.
In addition to that, 46% said bigger firms were not open to payment term negotiations and 70% said late payments in the past year had caused problems.
More than half of small firms said they suffered from supply chain abuse from larger business partners and said their cashflow suffered massively if they did not take action.
For some businesses these issues can be managed by opening new markets, exploring new possibilities and by improving sales.
Others may not be so lucky and could be left facing company administration if long term financial troubles persist – especially if there is no immediate solution.
Such an approach looks to maximise the value of a company’s assets with a wide set of powers typically granted to the administrator.
The study also points to an increase in the number of high profile cases whereby small firms are being undermined and thus facing financial difficulty.
Perhaps unsurprisingly, a lack of trust was found to exist between small and larger businesses with banks and utilities companies among those singled out.
The results of the latest poll echo a similar survey from the start of the year that suggested larger firms prioritise profits over ethical standards.
As a result the Forum of Private Business has launched a plan to aid smaller firms by looking to tackle bad business practices.
Overcoming hurdles to business are essential for SMEs looking to be successful, especially given the importance of such firms to the UK economy.
By Phil Smith