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Big business needs to get real when it talks to small business

Simon Sharwood
23 September 2011 3 minute readShare

Big business constantly misrepresents small business, and it’s time the sloppy thinking behind their mistakes stopped.

It happens almost weekly: My Business hears from a vendor that has company made its money serving big business, but which has now decided it wants to help us little guys too.

Over the years we have found it is nearly always sensible to ignore this stuff straight off the bat.

Here’s why.

Most companies that grow up working with big business do so because it’s a lot easier doing business with large entities. Think about it: would you rather have ten clients worth a million dollars or a thousand clients worth a thousand dollars? The answer is pretty simple: you’d die a death of a thousand cuts working with a thousand customers, but ten clients who can produce the same revenue means a lot less pain.

Businesses that serve large customers know this very well. But over time they nearly always saturate the market and run out of million-dollar customers. At this point they decide it will be a great idea to go for small business.

That’s when the trouble begins, because if you’ve been dealing with big business for a while your idea of a small business is out of whack with the reality of Australian business.

Yesterday, for example, we received a press release from a large data storage company called EMC which conducted a survey of Australian small and medium businesses and represented the sector as being on the “wrong side of [a] new digital divide.”

That’s a false assertion for two reasons,

One is that companies like EMC put small business in this position: big businesses simply don't offer small business much by the way of engagement. They let their resellers do that. And for very small businesses - 48% of EMC's sample employs 1-4 people - even resellers aren't much help. OfficeWorks and Harvey Norman are the most accessible source of technology and advice in the small business sector.

The second reason flows from the first, because EMC’s definition of small to medium business included organisations with up to 1000 employees.

As it happens, businesses with 1000 employees represent less than one percent of all Australian businesses and fall well and truly into the Australian Bureau of Statistics’ definition of a big business. Our source for this is the Bureau’s ‘Counts of Australian Businesses’, which offers a definition of small business as having 0-19 employees and medium business as having 20-199 on the payroll. The document reports that Australia has only “83,399 (10.2%) businesses with 20-199 employees and 6,349 (<1%) businesses with 200 or more employees.”

So EMC's characterisation of small business, and those of many other big businesses, is way too broad.

My Business feels it is therefore an unfair misrepresentation to characterise the attitude of the small to medium business community in Australia by asking for the opinions of larger businesses. And for a big business to say it serves Australian small businesses when it's true target is a small number of medium or large organisations is unhelpful.

So why does this kind of thing happen? We suspect it is because many big businesses use definitions of small business that come from their homes in the USA or Europe. In the former, small businesses can have as many as 1500 employees under some circumstances! Europe thinks of a small business as having up to 250 employees or up to 50 million Euro turnover.

This means that while big business talks a good game in support of small business, they’re really talking about other types of business.

That’s not fair to you in small or medium business, because it means you are mis-characterised and mis-targeted.

EMC is not alone in making this kind of misrepresentation. As we noted at the top of this piece, we get this kind of stuff week in, week out.

We think it happens because of a perception that anyone who offers small business a helping hand is doing a good thing. Reaching down to help out is almost seen as a charitable act.

Here at My Business, we know that small business don’t want charity. They want clear air in which to work and reward for effort.

Vendors that really want to help Australian small business, we hope, will take note of that and make more genuine attempts to characterise their intentions and the markets they wish to address, instead of reaching for clichés and inaccuracies in the way they address and describe our sector.

Big business needs to get real when it talks to small business
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Simon Sharwood

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