Government agencies play an important role in our economy when procuring products and services.
While big business is often in the headlines, small businesses account for most of the businesses in Western Australia — 97 per cent. They are major contributors to the economy, generating more than $50.1 billion in private sector activity each year.
You may be surprised to learn that the 227,000 small businesses in our state employ more people than the mining, retail and agricultural industries and the WA Government combined. They compete with big corporations who have the advantage of brand recognition, larger premises and big advertising budgets. They do this not by investing in flashy advertising campaigns, but in the quality of what they deliver.
The benefits of buying from a small business include:
Personalisation
You don’t often walk into a big box retailer and get greeted by name, or have the person at the end of the phone remember the last thing you purchased. However, when purchasing from a small business you are not just another number, but an individual customer that they recognise and appreciate. By forming an ongoing relationship with your small business supplier, you also get to know what to expect from them.
Experience
Many small businesses are driven by people with vast knowledge and experience in their area of expertise. You will often have the benefit of being served by a far more senior and experienced staff member than in a larger business, allowing you to receive better insights and service.
Value and quality
Although some larger businesses have buying power that allows them to offer discounted rates for products, they also have higher costs from premium locations and expensive advertising campaigns. Small businesses often have lower operating overheads and you may be surprised at the extra value you receive for your dollar when you choose to put your money into a small business.
Flow on effect
The small businesses that get your business, in turn spend their money with other small businesses. Accountants and bookkeepers, lawyers, marketing companies and couriers all benefit from money spent with other small businesses — keeping money flowing through the WA economy.
What part do government agencies play?
The State Government sector in WA has a critical role to play when it comes to small business. Not only do we provide advocacy, skills development and guidance directly to the sector through the SBDC, but government agencies have an equally important role to play when purchasing products and services.
With WA’s economic recovery from COVID-19 a priority and State Government expenditure forecast at $32.9 billion in 2020-21, it’s crucial that the public sector leads the way in choosing to drive money into small business. Because this grassroots level is where the majority of growth and employment will happen as we rebuild our economy. With shorter payment timeframes from government agencies to businesses mandated this year, the public sector can also provide a model to bigger businesses of how to be a good corporate citizen.
If you are responsible for procurement on behalf of any state government agency, I urge you to strongly consider your options for supply of goods or services and where you can, choose a small business. The benefits to our economy are enormous.
