SMEs value good relations with suppliers

YORKSHIRE firms are highly unlikely to drop a supplier just because prices have been raised, recent research shows.

But they do think a visit is important for customer relations with nearly 90% of respondents believing it can help.

The findings are part of a new business trends report from HSBC Commercial Banking.

The study found that nationwide around nine in 10 SMEs believed that good supplier relationships were critical in times of economic uncertainty or hardship.

Half felt that suppliers could help them in more difficult times because of their knowledge of the business, while 31% said suppliers could even save them money.

Just 4% said they disregarded the value of good relationship while 63% said that having good relationships with their solicitors, accountants, banks, utility company and goods suppliers was vital to business

Accountants are the most relied upon by more than one in five (22%) followed by solicitors at 12%.

The study also found that family and friends are classed as the primary advisers for nearly four in 10 (39%) of SMEs.

The businesses questioned said that trust is the number one factor in making a supplier relationship work (56%), with reliability, consistency of service and delivery coming second (22%).

Less than one in 10 businesses (9%) isolated value and cost as the defining factor of a good relationship.

Noel Quinn, head of commercial banking in the UK at HSBC, said: “SMEs recognise that good relationships with suppliers are vital to help them navigate through testing economic waters.

“For suppliers committed to helping businesses succeed, it is clear that having a close relationship comes from developing a good understanding of the company and building trust.”