For a small business, landing a deal as a supplier for a Fortune 500 company or other big firm is a dream come true, but you have to work hard to turn it into reality. It can take years to land that first contract, but it can be done. Here’s what executives at Fortune 500 companies that manage contracts with small business suppliers say you can do to swing the odds in your favor.
- Do your research before you approach us. “Study our website and learn as much as you can about us,” says Lisa Johnson, group procurement manager at UPS. “Then come prepared to talk about how your services or products fit our needs.”
- Don’t expect us to give you business right away. According to Theresa Harrison, director of supplier diversity at Ernst & Young, creating relationships, and building them up, is what will open the doors for you at any company regardless of size or location. “We want to feel like you understand our culture, and we want to understand who you are — and what value you bring to the organization.” Fortune 500 companies want to get to know you very well before they do business with you.
- Explain to us why you’re special. Small business owners need to differentiate themselves from their competitors, says Johnson. “Do your homework and find out what we buy. Then, in your pitch, talk about what sets you apart, what makes your product or service better than your competitors.”
- Don’t overpromise. Don’t try to be all things to all people, says Irwin Drucker, program director of supplier diversity at IBM. “Never promise to do something you can’t do. It’s better to start small, get your foot in the door, and then work up to bigger products.
- Consider partnering up with a pro first. Partnering with a prime contractor, called a “tier one” firm in Fortune 500 supplier-diversity lingo, is a good way to get started. “Finding a strategic partner, especially one that has offices in other countries, really sets you apart,” says Drucker. “We don’t expect you to have brick-and-mortar offices around the world, but if you have partner companies in six other countries, you’ll have a much better chance of doing business with us.”
- Get your certification. Many Fortune 500 companies have “supplier diversity” programs, geared towards giving subcontracting opportunities to small and minority-owned businesses. That’s because many of their own customers are significant suppliers to the U.S. government and are therefore contractually required to get a percentage of their products and services from diverse suppliers. Small businesses should definitely consider getting certifications if they’re owned by veterans, women, or minorities and can meet the requirements.
And now there’s a new way to get your foot in the door of a Fortune 500 company. A new website called Supplier Connection just launched as a one-stop shop for small and mid-sized businesses looking to sell to larger ones. IBM launched the website, along with five other mega-companies: AT&T, Bank of America, Citigroup, Pfizer, and UPS.
Stanley Litow, vice-president of corporate citizenship & corporate affairs at IBM, spearheaded the creation of Supplier Connection and says his hope is that it will streamline the application process in the same way the Universal College Application allows students to apply to multiple universities at once.
“When a small business goes onto Supplier Connection, they qualify or become a supplier for the six companies starting this,” Litow says. “Hopefully over the long term, hundreds of large companies will come in with billions and billions of dollars worth of spending and make it easier for small businesses to jump start themselves.”
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