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A New Strategy to “Drive” Small Business Growth

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A New Strategy to “Drive” Small Business Growth

By ngoriel, SBA Official
Published: July 11, 2014 Updated: July 14, 2014

Three years ago, entrepreneur Maurice Brewster made one of the best business decisions of his life: He signed his limousine company, Mosaic Transportation, up for IBM’s Supplier Connection – a collaboration between small businesses and the supply chains of Fortune 500 corporations

It was a wise decision because small firms that enter the supply chains of major corporations grow their revenue by an average of 250 percent and their workforce by an average of 150 percent.

In three years, Maurice has signed contracts with seven major corporations, grown Mosaic from 20 to 46 employees, and tripled his annual revenues. His company had lost half of its business during the Recession, but now it is reaping record profits. Maurice credits this remarkable turnaround to two things: he joined a corporate supply chain, and all seven of his new clients pay him up front with a corporate credit card.

Unfortunately, most Mosaic clients take far longer to pay; it took one company seven months to cut his check. Maurice says if every client paid him on time, he would expand tomorrow to New York and Los Angeles and create dozens of new jobs.

This is a common complaint from America’s small business owners. Timely payments and the cost of working capital can make or break a small business. And these ingredients are essential to job creation and economic growth.

Today, SBA Administrator Maria Contreras-Sweet joined President Obama at the White House to announce the launch of SupplierPay. It’s a new project dedicated to giving America’s entrepreneurs access to affordable, consistent working capital. It’s about paying them on time and keeping their interest rates low, so they can invest in new equipment, new products and new people.

Twenty-six major corporations have already signed up. They’ve pledged to shorten payment times or provide other creative financing solutions, so their small business suppliers have the confidence to hire more workers and expand their operations.

SBA will take the lead in recruiting additional corporations to join this endeavor.  We have a great case to make, because SupplierPay is a win-win for small businesses and their corporate partners. Supply chains are often shared across an entire industry, so there’s a positive spillover effect when capital costs are lowered. It reduces the price of goods and services. It allows investments in human capital that reduce preventable errors. It increases returns on cash and improves the overall stability of supply chains.

President Obama promised the American people he would use the power of his office to make progress on their behalf. Whether you’re a limo company, an auto parts maker or an IT services company, getting paid faster and on more favorable terms is a surefire way to drive job growth and help put America on the road to a more prosperous future.

About the Author:

Natale Goriel

SBA Official

Hi, my name is Natale and I'm serving as a Moderator for the SBA Community. Our goal is to continually improve this site to meet your needs, so we appreciate your feedback and participation.


To drive small business Internet plays a major role. Internet marketing is the best way to promote your business.
The idea that Big Corporations quit using Small Businesses for 'float' on their cash and just pay the damn invoice on time IS novel. Twenty years ago when I was a Small Business selling to them, all I ever heard was 'everyone does it that way', 'those are standard terms', and my favorite 'don't you know who WE are?'. We had a strong competitive advantage and an off-the-shelf product, so we ignored the common thinking and said "No. No cash in advance, no product." They hated it. We loved it. We lost little business over it. My rationale expressed to them was "you are the big guy; I am the small guy'; why do you want ME to be YOUR bank ?" Lack of positive cash flow is what kills most small businesses (duh ?!? ). This is a big step to breaking 'we always did it this way.' Ike
For small bussineses not getting paid can be a killer and I know many of them who went south just beacuse of that.They relied on one big business,with mayor customer and in between lose every day small ones.It is a quiet common mistake one can make,gladly there is some progress in this respect.
Small and local businesses must adapt to new innovative marketing strategies in order to remain relevant. It is key for business owners to share what strategies are currently working, what worked 5 years ago may be outdated and may not work today. Each week we feature such businesses who are implementing such innovative strategies worth sharing. Why reinvent the wheel or try unproven techniques? By business owners sharing winning strategies with others everyone wins.
Quick and affordable invoice factoring can accelerate business revenues and enable one to take on new clients. These benefits make factoring an effective tool to finance the growth of small businesses today.
I have my start-up growing. It is not easy actually. The things shared in this article hopefully can help small business and strat-up better.
This is a remarkable strategy to encourage small business owners while eliminating their vulnerabilities regarding timely payments. It is definitely something that would benefit small business owners.
For small bussineses not getting paid can be a killer and I know many of them who went south just beacuse of that.They relied on one big business,with mayor customer and in between lose every day small ones.It is a quiet common mistake one can make,gladly there is some progress in this respect.
If your business manages customer invoices, handling extended customer billing cycles with slow to pay and non paying customers can be a big drain on your available working capital. With invoice factoring, the factor company buys your accounts receivable, then assumes responsibility for collecting on the outstanding invoice. Your business would receive 90% or more of the total value of the outstanding receivable upfront.
I have some removals companies or man and van services that i work for,most of them are huge corporation in London and i agree with you when it comes about payment...It holds me down and takes so long to get paid that i end up forgetting about it.


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