Opportunity focus: corporate suppliers

The most inspiring business idea goes exactly nowhere without customers, and for business-to-business (B2B) services, that means persuading someone to part with corporate money.

The dream of a small business owner is an anchor client, a corporate customer that provides steady sales. Cracking into the vendor universe of a large corporation can increase revenue an average of 250 percent, and propel the doubling of employees one year after the first sale. Whether a small business is selling software, supplying hydraulic components, or offering site security services, acquiring a client in the FORTUNE 1000 nearly guarantees growth and greater stability.

Surveys of small business owners show the problem with landing a corporate client is not making a sale, but connecting with the client in the first place. While policymakers have focused financial policy on behalf of small businesses, such as lowering tax rates and encouraging banks to issue credit, the fundamental issue of acquiring customers has been left to entrepreneurs themselves. (One exception: state and federal governments themselves are big customers of small business, both by statute and voluntary policy).

In 2012, IBM began an initiative to connect small businesses to 15 big anchor clients (who collectively spend $300 billion a year on goods and services) via a Web portal called Supplier-Connection. Companies as diverse as Kellogg’s, Merck, Office Depot, Dell, and Citi agreed to a uniform bidding system for small business suppliers, located in a single Web presence. This collective approach also helps small businesses navigate the complexity of corporate procurement. Until recently, each large company had its own path to buying goods and services, and every sale began from scratch. Initiatives such as IBM’s make the process more efficient and thus affordable for smaller firms.

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