EOW Reflections: Pay quicker and thrive

What would you do if you got paid quicker? It’s a question we ask small businesses at every possible opportunity. It’s the other side of the coin from asking what problems you face because of not being paid on time. And because we’re asking a positive question the responses are usually framed in optimism and confidence.

Business owners say: I’d be more confident to invest; I’d get people better trained; I’d save time chasing payments so I could get out and talk to new customers; I’d have time to think about the business so I could plan better; I’d think about taking on a new person.

If you’re a customer of those suppliers wouldn’t all that be music to your ears? Wouldn’t you like to think that your suppliers were doing all of the above? If your supplier can invest, let’s say for the sake of argument, in training, upskilling, new and more up-to-date equipment, in better processes, in short, in being a better supplier, it isn’t just the supplier who benefits. It’s you too. Your supplier will be offering you a better service or product so that you can offer that to your customers too. I talked to a small business owner last night who’s shopping around for new equipment. He’ll be spending a lot of money but he’ll have the start of the art tools, the jobs with get done quicker and with greater precision, he’ll he able to increase output and hopes to increase productivity and grow the business. Not so long ago his business was on its knees and then customers started improving their payment processes.

I’m not saying it all down to better payment processes, but they certainly have a huge part to play. The risk to you, the quick paying customers is that your supplier becomes more attractive to other customers. Ultimately you could find your good and improving supplier is also selling to your competitors or into new markets and no longer has capacity to service your orders. All because you’ve paid quicker you’ve helped your supplier to improve and grow, and now you’ve lost them. They’ve outgrown you. My bet is that there is likely to be a loyalty factor here. As you’re the customer who paid me quicker than the rest and were instrumental in allowing me to develop and grow you can depend on me.

And there’s lots of scope for a collaborative working partnership to benefit further. As the bigger customer with the deeper pockets and the more developed processes there are other things you could help your smaller supplier with. What about policies like modern slavery or taking steps to reach net zero or help to digitalise. That kind of collaboration, on aspects of business that you’ve already worked on for your own business, could release even more of the supplier’s talent to improve their services and products and that way everyone benefits, up and down the supply chain. I may be freelance, a sole trader, a micro business but I’m part of and contributing to your success so why not hold me closer and treat me more like an employee and that partnership will service us both better. A bit of radical collaboration could go a very long way. Pay quicker and thrive.