Big is not necessarily better for business

Don't lose sight of SME business opportunities that could be right on your doorstep, writes Eddie Pacey.

Much has been written in recent months about SMEs, and just about everyone has been talking about how to sell into this sector.

Vendors, distributors and even a cluster of resellers have thrown their weight into getting the message over. But are they succeeding, or is it all a case of casting grain into the wind and watching it fall on stony ground?

In democratically advanced economies, SMEs account for almost 70 per cent of the total workforce and a correspondingly large share of business volumes.

It is criminal to ignore this lucrative market that has consistently yearned for IT development and support.

Bigger resellers are generally not interested because they believe there is not enough yield and the sector is too much like hard work.

What is astonishing is that SME resellers are equally complacent and appear to be less than interested. They remain far more attracted to bigger names and take great pride in naming their 'major' clients.

I recall visiting one reseller who bemoaned the drop in business from his major clients. In noting the relatively small industrial unit where the company was based, I had casually observed that it contained a mixture of small manufacturing and engineering businesses.

I noticed a couple of businesses across the road and asked the director if he knew what their IT requirements were and who they purchased from; the answer, not surprisingly, was "No".

Despite being right on their doorstep, no conscious effort had been made to target surrounding businesses that might yield good value-add IT requirements, better margin, with greater dependency for repeat business.

The company was so intent on large purchased mailing lists, that it had lost site of opportunities right on its doorstep.

This is not a unique experience; many SME resellers trying to establish credit or higher limits point to the 'quality' of their client base, proudly listing banks, financial institutions and other household names. There seems to be no realisation that this can actually be considered a weakness.

If 80 per cent of business comes from just a handful of four or five names, where is the confidence that they will retain business?

Each link in the supply chain must give greater credence to this untapped market that, by and large, has been left to fend for itself.

In tackling the end-user, the process must, however, start with the reseller, and receive tangible and measurable support further up the chain.

Eddie Pacey is group credit services manager at Bell Microproducts Europe.