As procurement pioneers, it’s no secret to you that small and diverse businesses face extensive barriers when they try to enter the market. Whether it be limited resources, low visibility, or unwieldy bidding processes, suppliers are in an endless battle to catch buyers’ attention.
In a world where the first page of Google is the most accessible place to search for information, it’s easy to focus on big-name suppliers—and we understand that.
For the sake of time (which we all know is limited), it’s easy to target these big-name suppliers with bid invitations. Unless we magically gain more than 24 hours in a day, you don’t have the time or resources to seek out local, small, minority-owned, or women-owned businesses to solicit bids from.
Yet, procurement teams have been given the unique task of breaking down barriers to entry for small and diverse suppliers.
You may be wondering how your team could possibly carry that weight—and we’re here to guide you in the right direction. But first, let’s take a look at what’s blocking these suppliers from the opportunities that big-name suppliers have.
Common Barriers to Entry for Small and Diverse Businesses
Let’s dive into 6 reasons why small and diverse business owners struggle to break into the market:
- Limited Access to Capital: It takes money to make money. Diverse and small suppliers typically struggle to secure the funding they need to grow or even sustain their business—making it difficult to compete with established businesses.
- Complex Regulations: The cost and complexity surrounding regulatory requirements is daunting. Many businesses pour a great deal of resources into achieving compliance, limiting their ability to focus attention on other important tasks.
- Lack of Market Access: In the same way organizations struggle to find suppliers, suppliers struggle to find organizations. Without established networks and market presence, small and diverse suppliers are at a disadvantage.
- Technology Deficiencies: It’s the 21st century—tech is the glue holding all operations together. As a business that’s at a disadvantage or just starting out, suppliers typically lack the tech infrastructure needed to successfully operate.
- Economies of Scale: Larger companies benefit from economies of scale—lowering costs because of bulk production. Smaller suppliers, on the other hand, have higher per-unit costs. As a result, their products or services are less competitive and slow economic growth.
- Supply Chain Limitations: Reliably sourcing materials and maintaining a consistent supply chain is crucial. Small and diverse suppliers often face challenges establishing those networks, limiting their operational efficiency at no fault of their own.
By addressing each of these barriers, organizations have the power to create a more inclusive, competitive marketplace at the benefit of everyone involved.
But that’s easier said than done, right?
It doesn’t have to be. Modern procurement tech is purpose-built for such a time as this—coming alongside you to support your organization.
The Role of Technology in Supporting Small and Diverse Suppliers
Purpose-built tech can be the superhero when it comes to lifting your organization to heights you never knew you could reach.
Taking on supplier diversity initiatives is heavy—so why bear the burden alone?
Using tools designed specifically to benefit both suppliers and organizations makes the process more accessible and less cumbersome. By using the right tech, supplier outreach and collaboration is seamless, paperwork is reduced, and time-consuming tasks are automated.
Here are just a few ways you can support small and diverse suppliers in your organization without breaking the bank or weighing down your team.
Enhanced Visibility
As an organization seeking greater supplier diversity, the first step you should take is increasing visibility. Cloud-based platforms and supplier databases allow your suppliers to access opportunities, view requirements, and submit bids online without spending an extra penny.
Plus, organizations get the added benefit of extended supplier reach and competition because they’re working out of a central repository of supplier information.
Simplified Bidding Process
Grueling bidding processes deter small and diverse suppliers from participating in solicitations. It’s a simple fact—these suppliers don’t have the time or resources to put toward cumbersome processes with low likelihood of success.
However, it’s easier now than ever to simplify the bidding process. Modern tech streamlines the entire solicitation process—from bid submissions to review and selection to contract management. Organizations have an eminent opportunity to create a more inclusive environment.
With systems like Euna Procurement, it’s easy for suppliers to search for bidding opportunities in the portal, view requirements, submit complete and compliant responses, and automatically receive updates—a win-win for organizations and suppliers.
Transparency in Decision-Making
Creating a transparent process allows suppliers to clearly see if they fit the bill for the evaluation criteria.
With purpose-built tech, organizations can easily outline their scoring criteria and provide that information to suppliers so they know if they can meet the organization’s needs. When suppliers have that kind of visibility, they’re more likely to trust the process and invest the time into bidding.
As an organization, you’ll also be able to filter down to each certified diverse supplier that submitted a response to consider who best fits your criteria and meets the needs of supporting DBEs.
Relationship Building
Technology isn’t meant to replace the human element of procurement, but rather complement it. Building strong relationships with your small and diverse supplier group is an important piece of the puzzle.
By providing regular communication, feedback, and support, you can build trust and foster strong, long-lasting partnerships.
Modern tech comes alongside those efforts and gives you the tools and resources to effectively communicate in a centralized location—enhancing the supplier’s experience and giving you easy touchpoints.
Leverage Modern Tech to Help Break Barriers
Through enhanced visibility, simplified and transparent processes, and strong supplier relations, purpose-built solutions like Euna Procurement are designed to empower organizations in their supplier diversity initiatives.
Ready to make a difference in the world around you? Request a demo of Euna Procurement to learn how you can effortlessly support the causes that matter most to your organization.
