In a bid to give small businesses access to the kind of buying power bigger organisations usually enjoy, one entrepreneur has launched a service 10 years in the making.
Michael Reid launched SME Savings last year, a business designed to put more dollars back in the pocket of cash-strapped small businesses. The idea sprung from a discussion with a sole trader, who told Reid that SMEs were getting a raw deal as suppliers inflated their prices to compensate for the lack of profits they made in servicing the sector. It was then that Reid realised businesses on a shoestring deserved better.
“I didn’t like that small businesses weren’t getting a fair deal,” he recalls.
So in 2011, Reid’s vision became a reality. SME Savings offers its members deals on everyday business essentials and services like fuel, banking, technology, training and stationery. After registering via the website, businesses order their materials from the suppliers at discounted prices, which are negotiated in advance by SME Savings.
But don’t mistake his site for a run of the mill coupon operation, Reid warns.
“When you open an account with us the prices offered through the suppliers are all discounted and ready to purchase everyday, allowing businesses to buy in bulk and trade as normal,” he said.
Some of Australia’s biggest businesses have teamed up with SME Savings, including Officeworks, Budget Car Rental, Commonwealth Bank, BP, Strive, Powerbuy I.T and Elgas. According to Reid, HR services will be added to the growing list of suppliers in the near future.
“This [HR service will] helps SMEs to hire employees that share the same vision of their business by providing psychometric testing for a third of the cost,” he told Dynamic Business.
Reid said his strategic partnership with Officeworks, for example, has saved his members thousands. For example, the owner of a new travel agency saved over $5,000 in business start-up costs by using SME Savings, according to Reid.
“With Officeworks, customers receive 40 to 50 percent off. Every business uses pens, paper, staples, printer cartridges, so I had to have a partner in that field,” said Reid.
After he’d secured Officeworks as a supplier, Commonwealth Bank came knocking on his door. Next was BP, which allows SME Savings to deliver substantial discounts on fuel, helping fleet management businesses save hundreds off their weekly fuel costs.
But it isn’t just SMEs who are cashing in on the savings – suppliers too are benefitting from the service, with Reid revealing many of his suppliers have generated up to 80 percent more business as a result of their partnerships with his business.
After spending many years developing his business, Reid has some handy start-up tips for new businesses.
He suggests every start-up owner should:
- Invest in good I.T and web development: A good website is everything, and customers don’t respond well to poorly designed site. As these services can get expensive, he suggests SMEs try to keep it simple.
- Have passion or you’ll never make it through the tough times. If you’re going into business for the sake of money, you’ll waiver and lose interest, Reid warns.
- Listen to those who argue against your ideas, as you’re not always going to be right.
- Fund it properly, because cashflow is the fuel on which a business runs.
Since launching, over 450 SMEs from construction companies to law firms, have registered with SME Savings.