Leveling the Procurement Playing Field for Social Enterprises AND Small Business

Businesses are increasingly realising that focusing on both profit and community well-being is not only the right thing to do but also a smart business strategy. This shift brings numerous benefits, from enhanced brand reputation to increased employee morale and the ability to attract top talent.

One key way that businesses can have a social impact is through supporting social enterprises. These for-profit businesses are intentionally designed to address social problems. By buying from social enterprises, governments and larger corporations can create jobs, support local communities, and foster innovation that tackles widespread issues.

However, social enterprises shouldn't be the sole focus when it comes to inclusive and positive procurement. It's crucial to give small businesses of all types more and fairer access to contracts. This benefits our communities in several ways:

• Stimulating Local Economies: Small businesses are often the backbone of local economies. Supporting them helps generate more economic activity and jobs within the community.
• Fostering Innovation: Small businesses are known for their agility and ability to think outside the box. Giving them access to contracts can lead to innovative solutions and approaches.
• Promoting Diversity: Small businesses are often run by underrepresented groups and individuals. Inclusive procurement practices can promote greater diversity and equity within the business landscape.

Unfortunately, procurement contracts can perpetuate a disadvantage for small businesses. They often include unfair terms such as:

• Loss of Intellectual Property (IP) Ownership: Clauses that grant large corporations ownership of IP developed by the small business can stifle future growth and innovation.
• Restricting Exclusivity: Limiting the small business's ability to work within the same industry can hinder market access and potential income.
• Unfavorable Payment Terms: Long payment cycles or unclear performance metrics can leave small businesses financially vulnerable.

How Can Small Businesses Protect Themselves?

• Research: Know the standard procurement terms and practices before entering negotiations.
• Seek Expert Advice: Consult lawyers who specialise in contracts and intellectual property.
• Negotiate Everything: Discuss IP ownership, exclusivity, payment terms, and other relevant clauses.
• Build Relationships: Foster positive relationships with procurement teams to find mutually beneficial solutions.
• Be Willing to Walk Away: Don't be afraid to turn down an unfair contract. Your IP and business potential are valuable assets.

Governments and large businesses have the power to create a more level playing field for smaller suppliers. By shifting a portion of their spending towards social enterprises and adopting fairer procurement practices that support small businesses in general, they can foster a more inclusive, sustainable, and innovative business environment that benefits everyone involved.

Remember, everybody lives by selling something.

Some relevant articles:

• Big fish, small bait: suppliers beware
• Profit AND Common Good

Barrett helping people and businesses engage, communicate, and sell better, faster since 1995.