Businesses blow billions by renewing not reviewing
15% of enterprise owners believe they could have saved £50,000 if they have shopped around for cheaper supply deals
UK small businesses lost a combined total of £106bn by renewing their current supply deal instead of shopping for a better deal, according to a report by Tungsten Network.
The survey of 1,000 business owners revealed that the average respondent could potentially have saved 6% of their annual turnover, if they had sought out a cheaper competitor to their suppliers rather than renewing their current contract.
28% of respondents believed they could have saved between £5,000 and £20,000, with 15% of enterprise owners believing they would be £50,000 better off had they looked towards the markets.
Just 42% of those surveyed admitted they reviewed their wholesaler annually with only 29% doing so two or three times a year, and just 19% assessing their deal on an ad hoc basis or when they are dissatisfied.
Richard Hurwitz, CEO at Tungsten Network, said:
“If British small businesses could realise even a small percentage of the estimated savings identified in the report, profitability would soar and working capital as well as cashflow would be significantly improved, allowing businesses to be more agile and flexible.
“With a clear procurement strategy, the potential savings are considerable and this research just highlights the value of having good market intelligence.”