Supplier Connection: Will It Really Help Help Small Businesses Get Corporate Contracts?

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Supplier Connection: Will It Really Help Help Small Businesses Get Corporate Contracts?
Obsession Is A Gritty Little Word
Venture Deals: Understanding the Venture Capital Industry

Posted: 25 Mar 2012 06:34 PM PDT

IBM and several other large corporations have launched a directory where small businesses can get listed to do business with large corporations.

Called the Supplier Connection, the site is open to U.S. small businesses.

If you are wondering what “small” means, it means your business has to have less than $50 Million in revenues or fewer than 500 employees. You have to provide products or services in chemicals, construction, consulting, financial services, auto parts, HR services, information technology, marketing communications, market research, printing, software or security (for the full list, see the Supplier Connection website).

Some of the large corporations that are involved along with IBM include JP Morgan Chase, Kellogg’s, Pfizer, Caterpillar, Citi, JohnDeere, AMD and Facebook. The U.S. Small Business Administration has also gotten behind it.

But Is It Realistic for Small Businesses?

When I first heard about this from Laurie McCabe’s site, I thought it was a great idea. I was excited and decided to try it out.

What I discovered is that the paperwork and requirements are daunting.

First, let’s talk about the paperwork. Bureaucracy is a huge barrier to growth for small businesses — even the perception of heavy bureaucracy is a barrier. According to the Wall Street Journal, one business owner reported that completing a Supplier Profile is “not a one-hour routine” but takes commitment.

Most small businesses don’t have anything near the 500-employee limit for this program — instead, think 5 employees. That is a much more common size for a small business. In a 5-employee small business, there’s rarely anyone you can assign who will have all the knowledge to complete the paperwork. The business owner will likely be handling the paperwork himself or herself, probably in the evening (since that’s the only time available).

Beyond the paperwork is the whole issue of whether you can meet the system’s mandatory requirements. I started filling out the application and managed to get through the first four steps out of 9, in 20 minutes. ”Hmm, that’s not so bad,” I thought.

Then I got to step 5, the Environment section. It stopped me cold. For instance, how many of you could say “yes” to the following?

Does your company have a Corporate Responsibility and Environmental Management System, which measures performance, sets goals, and discloses results?
Does your company define, deploy, and sustain your corporate responsibility and environmental management system through your engagement with your suppliers?
Does your company cascade this set of requirements to your suppliers who perform work that is material to the products, parts and/or services being supplied to your customer?

In all, there were over 20 questions about environmental, ISO9001 and ISO14001 compliance, 16 of them required fields to answer.

Very few small businesses with under say, 20 employees, could say yes to the above questions. And what if you answer “no”? Well, you are required to specify the exact day, month and year when you plan to be in compliance. In our business we have no plans to create environmental policies and systems. Being an Internet publisher we shut off lights when we don’t need them, recycle paper and soda cans, avoid printing emails and documents unless absolutely necessary, and use power management options on our computers and other equipment. But we do not write corporate policies about those actions — we just do them.

Our suppliers (other small businesses and entrepreneurs) would laugh — or cry — if we asked them if they complied. There’s no way that even if we wrote policies and systems, that we could “cascade” that requirement to our suppliers.

So that was the end of my attempt to complete the application. I gave up.

Some Bright Spots

On the other hand, I do see positives with this program:

For those who go through the paperwork process, it is something that can give your business a competitive edge. Just think of all those who will give up or can’t meet the requirements.
Another positive: you can start the application process and save it as a draft, and finish or edit it later. That way you can divide up the work and spread it out over a few days if you need to.
Finally, there’s just the fact that this directory exists. IBM is to be commended for starting it. In concept it’s a great idea.

I urge IBM and all the other corporations involved to streamline the requirements to make them more realistic for small businesses. Otherwise, the Supplier Connection will be more about medium size businesses. And I’d love nothing more than to come back and update you that the application has been streamlined.

From Small Business Trends

Supplier Connection: Will It Really Help Help Small Businesses Get Corporate Contracts?

Obsession Is A Gritty Little Word

Posted: 25 Mar 2012 11:30 AM PDT

Obsession is a gritty little word.

It's when an idea or a thought continually intrudes on a person's mind. It can haunt you and besiege all your focus and energy. Depending on how well you direct your obsession it can be very bad or very good.

Obsession

At the core an obsession is the thing that sits opposite of you. There you are at the table and across from you is the thing that you carry in your mind the most. Is it fears and failures that dominate your thoughts? Or maybe it's family and the fire for a new idea?

You can choose. Here's the thing…

Your Obsession Becomes Your True Focus

And it feels as if we can only carry a few of those at a time, so choose well. Plus, it seems to play a role in innovation. In “Focus: To Light a Fire Under Your Career” John Mariotti says that obsession causes you to:

"Get into all the dirty little details that will make a big difference."

Business is a constant response to need and desire. The better you understand the desires that impact your business the more room you make for innovation. The deeper you go, the more you can see angles that others have missed, ignored or dismissed.

Dirty Hands…Great Ideas

You can also get your creative thoughts in gear by listening to dirty hands. I mean the people who get their hands dirty — the ones who do what you do. Their insights tend to be core and practical (verses academic). Anita Campbell says:

"Reading the ideas and insights of entrepreneurs who are in the innovation trenches every day is valuable."

And she offers a short lists in “Must-Follow Blogs for Everyday Innovation.” But that's not all you can do.

Remember, the goal is to have your ideas to walk with you long enough to see them in a new light. And while those old concepts stay with you, you do new things to turn them over and over until they become more or better.

In this regard, Anita offers four ways to spark your personal brainstorming process in “4 Ideas That Stimulate Solo Innovation.” One of her suggestions includes "story boarding." I like this one the most because it adds some structure to your brainstorming.

Anita says:

"If you're thinking about how to improve customer service…, you could storyboard what happens when a customer enters the store."

In order to make this work you have to relive your customer's experience and mentally walk through your business the way your customer does. When you do, you'll have the chance to see things that really work, as well as the things that just irritate and get in the way.

Make a visual image of each step in the process and include what you want each step to feel like and be like for your clients. Because you're using images and graphics, it will open up a different part of your mind and there's no telling the clarity and creativity that can show up.

Obsessive Thinking Photo via Shutterstock

From Small Business Trends

Obsession Is A Gritty Little Word

Venture Deals: Understanding the Venture Capital Industry

Posted: 25 Mar 2012 05:30 AM PDT

Venture Deals Everything that an entrepreneur wanted to know about venture capital but was afraid to ask. Or maybe you are so lost, you don’t even know what questions to ask. Term sheets? Accelerators? Convertible debt? When do you use a venture capital firm? All of these were topics completely foreign to me, until I picked up a copy of Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist at the local library.

All entrepreneurs need money to start and grow their business. But how are you going to get it? Bank? Friends? Begging on the street? I first learned about Venture Deals during a panel discussion on micro-VC efforts. The presenter said this would be a good starting point, and he was right.

The authors are a former lawyer (Jason Mendelson) and entrepreneur Brad Feld (@bfeld). The best part about the book is that the terms and practices are explained in a way that is easy to understand by people who have never raised money using VC firms. Most paragraphs are summarized with “The Entrepreneur’s Perspective” – a simple explanation of what was just read and how it pertains to the entrepreneur.

The book opens with an overview of venture capital: who’s involved and how to raise money. These chapters do a good job of asking entrepreneurs questions they may not have thought of before:

How much money are you going to need?
How do you find the right VC?
Who’s involved in raising money?

Then the deep dive begins: the term sheet. The term sheet is the first critical element of venture capital. For clarification and understanding, the authors divide it into four sections: the overview, the economic terms, the control terms and “other.” The Economic Terms illustrates the financial aspects of the term sheet. Control Terms describes how the VC is going to control their ownership of the company. Here the reader is introduced to: the Board of Directors, conversion and protective provisions, etc. The final Term Sheet section is the catchall for other legal and financial verbiage.

The process continues with chapters that explain the process from a higher view: how venture capital funds work, negotiation tactics, correctly raising money, and the stages of VC investing. The section “Negotiation Tactics” could have been a stand along book, but the authors do a good job of highlighting what’s important for the entrepreneur. This section expands on styles and simple Do and Do Not Do explanations.

Still lost in some of the wording? The authors even included a glossary and index to accompany the examples in the book. All of the bases are covered.

If you are interested AT ALL in raising money for your company, read this book. Even if you do not use a VC firm, READ THIS BOOK. Venture Deals is an easy to understand book that quickly gives you an understanding of the VC industry.

From Small Business Trends

Venture Deals: Understanding the Venture Capital Industry