Am I alone in wondering where all of this is going to end? And, no, I don't mean Libya, Japan, Congo and all the other horrors, which.. don't even get me started. I am talking about the role of the SME in the Czech business environment (and maybe elsewhere!).
The last few weeks I have been reeling from the behaviour of some of the biggest companies that we are working for, might be working for (if we are prepared to do it for free....) or that my friends and others are working for.... Some examples:
a) A [huge] company that we worked for once before and are just starting for again, who informed us that their payment terms are 90 days as of 1st January this year. Says who? If we don't agree, then they will go elsewhere. If we do agree, then we are going to incur some quite hefty costs on their behalf and then act as their bank for three months (if, indeed, they do actually pay within the three months). That was last week.
b) A [nother huge] company that after lots of negotiation promised us payment terms of 30 days, sent all the necessary paperwork before we even started and now, 90 days later, we are still waiting....also last week
c) Being terminated with one week's notice from a long standing contract with a three month termination clause (negotiated by the client), for no particular reason other than that they had decided to 'do things differently'.
d) Another agency in Prague calling up one of our clients and asking for a meeting with a view to pitching.. and getting it!! Because, we know, and they know, and the client knows, that if they offer to do it cheaper than us.. well off we will go.
I can't even go on, as some of the companies I am thinking of will read this and think I am being disloyal. Hey ho. The point is, though, that those of us in the service business are all fighting for a very small piece of cake in order to feed a lot of quite hungry mouths. So the SMEs are having to get ruthless and undercut each other .. and the big boys can sit there and say 'ha... we know you want our business... so make us an offer. And, by the way, if you are cheap enough, we will even let you act as our banker'.
I am lucky enough to have been doing this for a long time and to be able to cope if I have to wait for three months to get paid, get terminated at the drop of a hat, and so on. But what hope the young entrepreneur? Or, really, the SME generally. Soon the only companies operating here will be the big Czech state-owned companies, the companies owned by a few very wealthy Czechs and those international companies that see the need to have an office in the CR, but don't treat it as a major place for business. Is that so different from the communist days? I don't think so.
Time to start an uprising I think. Where's my gun...
PS: I am speaking at a seminar on 'entrepreneurship in the Czech Republic' tomorrow evening... I think I have warmed up nicely...