- Cost control top issue for 7 in 10 SMEs
- UK businesses start savvy but lose it when they grow
- Mid-sized enterprises at greatest risk from maverick spend
At a time when 7 in 10 SMEs are struggling to cope with the impact of rising costs - and maverick spend is cited as the number one issue for 71% of businesses looking to control budgets. New research suggests the UK’s SME community can save millions from their cost base by shopping around on the everyday items they need to run a business.
New research from Applegate PRO, which surveyed 726 SME senior decision makers, discovered it was the nation’s smallest businesses that are the nation’s savviest shoppers. These businesses are between 50% and 100% more likely to shop around and compare prices on everyday items than their larger counterparts. The research suggests the savvy-buying, cost-conscious nature of very small businesses seems to get lost as businesses grow – even though the challenge of managing fixed costs becomes a bigger issue.
Small businesses and, in particular, sole traders are more likely to spend time comparing prices for low-cost items such as tea bags, toilet roll, staples and light bulbs than larger SMEs with 100 or more employees. The gap widens even further for larger items such as printers and printer supplies. These findings could also point to the influence of sales reps locking in repeat business orders, and who tend not to bother so much with the smallest businesses.
Percentage of SMEs that shop around for before making a purchase
| Sole-trader | Small | Medium | |
| Printer cartridges | 83% | 79% | 33% |
| Printer paper | 53% | 52% | 22% |
| Printers | 48% | 46% | 36% |
| Batteries | 29% | 27% | 11% |
| Light bulbs | 20% | 20% | 10% |
| Tea bags | 13% | 15% | 9% |
| Toilet roll | 17% | 20% | 11% |
| Staples | 12% | 15% | 11% |
Stuart Brocklehurst, CEO of Applegate Marketplace commented: “In a volatile or uncertain market, managing costs is essential for the majority of UK businesses. It is a concern that small businesses seem to be growing out of savvy buying as their business grows – rather than growing into it. As these businesses grow, patience to obtain the best value deteriorates and maverick spend can increase.
“Larger businesses have procurement teams that handle purchasing, but for smaller and medium sized firms, many have to weigh up the value from shopping around versus the time and cost involved in doing this. Applegate PRO levels the playing field for businesses of all sizes, helping them secure the most appropriate products for their business, saving time, money and helping businesses to proactively control costs. The online buying tool streamlines request for quotation and purchase order processes that can take businesses hours or even days, into a quick and easy function that takes minutes.”