Large companies across America are starting to wake up to something small business owners have known all along: working with smaller suppliers can make their operations stronger, faster, and more profitable. But while this shift creates new opportunities for minority and women-owned businesses, significant barriers still stand in the way.
According to a new survey by Supplier.io of more than 150 top executives from major companies, big businesses are scrambling to work with more small suppliers. The reason? Global trade problems, rising costs, and supply chain disruptions have forced them to look for new solutions.
Why Big Companies Want Small Partners
The numbers tell a compelling story. When asked about recent trade tensions and tariffs, 91 percent of executives said they’ve changed how they work with small businesses or plan to do so soon. Most are increasing their partnerships with U.S.-based small suppliers – great news for domestic entrepreneurs who have long struggled to break into corporate supply chains.
The benefits are real and measurable. More than half of the executives reported better quality work and stronger supply chains when partnering with small businesses. Half also saw their costs go down. One-third said small suppliers helped them innovate faster, and 20 percent credited small partnerships with helping them win new customers.
“Small suppliers are no longer seen as a risk – they’re seen as the solution,” the Supplier.io report explains. This represents a major shift in thinking that could open doors for thousands of minority- and women-owned businesses.
The Opportunity Gap
Here’s where the story gets frustrating for small business owners. Nearly every executive surveyed – 96 percent – said they would work with more small suppliers if it were easier to find and vet them. Yet the reality shows a different picture. On average, large companies only spend 7 percent of their total purchasing budget with small businesses.
This gap between good intentions and actual spending reveals the real challenge. While corporate leaders want to diversify their supplier base, their current systems and processes make it hard to do so effectively.
For minority and women entrepreneurs who already face additional hurdles in accessing capital and corporate contracts, these operational barriers create even steeper mountains to climb. The same systemic issues that led to the lending disparities we see in banking, where Black-owned businesses face 39 percent loan rejection rates compared to 18 percent for white-owned businesses, also show up in corporate procurement.
When Things Go Wrong
The stakes are high when small supplier relationships fail. The Supplier.io study found that 41 percent of large companies had a partnership with a poorly vetted small supplier fall apart in the past year. When this happened, the consequences were severe: 66 percent suffered financial losses, 48 percent faced project delays, and 48 percent dealt with unhappy customers. Nearly half of these companies lost more than $10 million.
These failures often happen because companies don’t have good systems to research and monitor small suppliers. This creates a catch-22 situation: companies want to work with small businesses but are afraid of the risks, especially when they lack proper tools to evaluate potential partners.
Breaking Down the Barriers
The research identified several key obstacles that keep small suppliers on the sidelines:
- Complex onboarding processes that can take months
- Lack of reliable data about small supplier performance
- Internal resistance to changing established vendor relationships
- Difficulty finding qualified small businesses in specific industries
For minority and women-owned businesses, these barriers are often compounded by network effects, they may have fewer connections to corporate decision-makers and less experience navigating complex procurement processes.
The Path Forward
The good news is that 85 percent of executives plan to increase their small supplier spending next year. This trend, driven by practical business needs rather than just good intentions, creates real opportunities for diverse entrepreneurs.
However, turning this momentum into meaningful change will require both corporate commitment and better tools. Companies need to invest in systems that make it easier to find, evaluate, and work with small suppliers. They also need to measure their progress and hold themselves accountable for moving beyond good intentions to actual results.
For minority and women entrepreneurs, this shift represents both opportunity and urgency. As large companies recognize the value of small supplier partnerships, those who can position themselves effectively and build strong operational capabilities will be best positioned to benefit from this changing landscape.
The door is opening wider for small businesses in corporate America, but walking through it will still require preparation, persistence, and the right support systems.
