The difference between doing business with large and small companies

In business, it is not a hidden fact that you should know the background of your partners. One of the important things to take note of is if you are dealing with a small or large company. While others may not see the difference between the two, there is a great gap between how the overall flow of a transaction goes depending on the size of your chosen manufacturer/company.

In this article, I will teach you the difference between doing business with large and small companies. I will also hand over tips on which one would suit you better. By the end, you should have a clear idea of the people that you must deal with.

Large Companies

Defining large companies is a tall order. There are no exact criteria on whether or not a company is considered as one. However, the key feature is if they have many transactions on a given term and can provide deliverables at a fast pace.

Consequently, it is also an industry-related term. For example, a marketing company with 50 employees can be considered large. On the other hand, a factory with the same number of people can be seen as small.

Pros

More Structured

One tell-tale sign that a company is large is its structure. If it has a branching format ranging from Board of Directors to CEO, CTO, employees, and Management, then it can be said as large. A great advantage of working with such companies is that it is more organized. Meaning that there are proper paper works for everything, and you won’t get lost in translation.

Efficient

Large companies will always prioritize the efficiency and quality of their product. This is because most large ones have been in the industry for a long time, meaning that their processes are tailored to bring out the best and fastest processes. Be it procurement, assessment, and delivery, large companies are more than capable of dishing out results in no time.

This can also be attributed to the sheer manpower and resources that they have. After all, they would not have grown large without making proper use of the people and skills that they have around them.

Higher Chance of Revenue

When partnering with a large company, you can also expect bigger revenues. You might need more work to be done on your side, but the monetary value will never decrease. In the case of manufacturing and delivery, there is also a greater chance that the products to be delivered will be successful and working, thanks to the factories that they have.

There are also better opportunities when dealing with them. One positive review or word of mouth can spread to other big companies, leading to more closed deals and higher sales and revenue.

Secured Transactions

Working with large companies entails better protection in terms of contract and payment. As said earlier, they have more structured processes, and this results in organized paper works. Similarly, these types of organizations are concerned with formality, specifics, and transaction confidentiality. This means that everything you do in partnership with them is recorded on a database that can be used for verification.

Cons

Restrictions

Restrictions refer to the freedom of movement that you have in a specific transaction. It also tackles how versatile and flexible a contract can be in the long run. When dealing with large companies, you get restrictions for them to protect their product and branding. This means that you might be limited in terms of what you can say, do, or act especially against the company. This removes creative freedom that might be beneficial for specific projects.

Not only that, but everything that you want to do is subject to approval. Tiers of higher-ups might not agree with the things that you offer, and it can take a long process just to reach a single, unified solution.

Lesser Influence

Influence is defined by how you can affect the decisions of your partner company. It is also seen as your “hold” towards the partnership. In the case of large companies, it will be harder to assert the things that you want to be changed because of the structure of the system. In the end, you might be treated as a mere additional statistic to fulfill their goals. This makes it a bit hard to make a real difference based on your observations and findings.

Less Connection

In any partnership, a connection is important. This refers to the feeling of trust and bond that you and your partner have throughout the venture. In the case of a large company, you might be talking to a manager or relations officer during the offer. This greatly decreases human connections that might prove to be crucial in the long run. Similarly, there are lots of competition when dealing with large companies, and it can lead to you trying to prove yourself constantly.

Small Companies

Small companies, unlike large companies, are those that have lesser manpower and employees. While this might be seen as a great disadvantage, it also has its fair share of benefits. Let us take a look at some of them.

Pros

Familiarity and Connection

Most small companies are start-ups or niche ones. They are built with an owner’s family or even friends, and this heightens the familiarity and connection between them. With small companies, it is more likely that you as a partner will gain more human connections compared to a large one. This is because small companies are more tightly-bound, meaning that they have strong bonds with their employees and managers.

One term that comes into mind is community. Small companies lean towards understanding the motivations and intentions of those that are part of their pack. This helps in creating long-lasting bonds that may even last for years and decades.

Influence Decisions

When creating offers with a small company, you will likely deal with the CTO or CEO yourself. This means that you gain leverage in raising your concerns since your issues will be directly addressed to the owner. Thus, more influence on your side is available. You can be part of big decisions of the company as a partner, and even enact change as part of your projects and services.

Flexible

Small companies are not very structured and organized. Thus, adjustments can be made even on a quick basis. This also gives you more leverage to make use of your creative juices especially during the planning and implementation stage of the partnership.

Cons
Resources

Based on their name alone, small companies do not have the same resources as large companies. This entails that they are limited in terms of manpower as well as utilities. For example, bulk ordering on a large company might not be a problem; but the same could not be said for a small company. They might not even deliver at the same speed as a large company due to the restrictions in the workforce and employee number.

Instability

Small companies are still finding their way to grow in the market. This means that partnerships with such can be risky and volatile. If losses can happen to a large company with lots of following, then it is not a hidden truth that it can also occur to small companies that are very vulnerable to changes in the economy.

Which one should you choose?

Choosing the perfect one for you is dependent on your personality, work ethic, as well as the nature of your business. For example, if you are a business owner that values structure and being organized above creativity, then you are better suited for a large company. This also applies if you are looking for more opportunities in terms of growth, revenue, and even security.

For those that value real-life connections and bonds with the partner, then I recommend choosing a small-scale company. These organizations can better cater to your needs and provide the inspiration that can propel you forward.

Another thing to look at is business type. If you are a company that wants to engage with someone who has a more generalized production type such as cotton products, then it is better to deal with large companies.

On the other hand, it is more practical to transact with small companies when tackling niche or more specific products. This is because they won’t need as much manpower as those that offer different types of goods.

Verifyfull

Verifyfull is your trusted provider of information for all things related to China-based companies. Consider us as your pair of eyes in the country, as we know how the industry works there. It is crucial to contact us before dealing with any Chinese company since we will audit their performance as well as past transactions for you. If you need help or guidance in your decisions and partnerships, you can contact us. We are more than happy to provide a reliable service that will keep your worries away.