Are You Choosing to Stay Small?

What a Small Business Should Consider When Choosing Suppliers.

You want your business to be successful and grow, but are you choosing to stay small because of your choice of suppliers?

Outsourcing work is an excellent solution to meeting budgetary constraints, but it is important to consider the return on investment (ROI). It is attractive to pay submarket prices, but consider the employee wages. Charging low rates mean lower wages for employees and subpar talent filling their positions. Will this really meet your business’ needs? By choosing the wrong partner, you lose the opportunity to grow your business with excellence.

Are You Choosing to Stay Small?

Every business owner wants to see their business succeed—and most want to see their business grow. It is, however, easy to get stuck. Sometimes the reason those businesses get stuck is because they are actively choosing to stay small because of their choice of suppliers. Outsourcing work can be an excellent solution to meet budgetary constraints, but it is important, when choosing where to send your work, to consider the return on investment (ROI).

Michael E. Gerber, the world’s number one small business guru, states that small businesses are not small by their intent but that they are stuck there. Choosing the right suppliers can make the difference in between being stuck and seeing your business flourish.


  • Are they delivering the best bottom line;
  • Are you receiving the best value for service or return on investment (ROI); and
  • Are they meeting the outcomes you have set out to accomplish?

Gerber puts it beautifully: “small businesses is a state in time.” New business’ never have the goal to remain small and unprofitable with the ample investment of vision, time, and resources that are poured into them. Unfortunately, a majority of business get stuck thinking small and become redundant.

Most of us know the adage: “we are only as good as the company we keep”—so why is it that many companies choose sub-par service providers to fulfill their business needs?

This practice is especially common when companies are accessing professional services: freelance web developers; copywriters; bookkeepers; lawyers; and marketing experts. These individuals, while hard working and talented, have a perfect business model for a small-scale operation—not for a growing enterprise. When the goal is to build a business to exceeds millions of dollars in annual revenue, it is important to source a supplier who is also exceeding those revenue goals.

Ask yourself: How can a supplier help you grow your business if they haven’t been able to help themselves?

While it is attractive to be able to approach a small business or an individual to complete work at a submarket price, consider the cost. If they undercharge you—they are underpaying their employees. Would the best of the best, the cream of the crop, stick around in a company that underappreciates and underpays them when more attractive offers are on the table?

It all comes down to the value received compared to the cost of the service.
We have all done it.

I have fallen into this trap in the past by hiring the “best-priced” Information Technology (IT) management company I could find. I prided myself in the deal I was getting by paying only $80 an hour for their very best—their senior IT Technician! We worked this way for a few years until it finally hit me: by charging those low rates our provider was undercutting their technicians. To remain profitable that technician, their senior guy, would have been making $50,000 a year at best. The market rate in Saskatchewan is double that. At those rates, they were neither able to attract nor retain the best talent. I may have paid them less, but in all honesty I did not save any money because the value was not there for the price. Instead of delivering the best bottom line I wasted three years of opportunity to build the best infrastructure to support my business. 

Through this experience, I learned that many other businesses do the same.

Some leaders try to save money by paying the lowest price for services but incur the loss of opportunity to grow their business with the right partner.

Look for the Best Value, not the Lowest Cost.

My advice to those who are looking for the best balance is to look for a provider that is not the least expensive, but that can demonstrate the best value. See the chart above. The value, which a well-established business can provide, extends far beyond the immediate work you need. A well-established provider not only provides services also helps to achieve your business objectives and will be able to scale up their services to support your business growth.

Birds of a feather flock together—likewise, your suppliers should be your partners; if they are successful and sincere they will be able to help you achieve a higher level of success for your business. Prevent getting stuck by thinking small: review which of your suppliers will be able to support your growth and which are dragging you down.

Choosing right partners and changing the way you think makes all the difference between making it big or staying where you are.

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