Survey finds businesses lack ability to bargain

PUBLISHED : Thursday, 06 April, 2000, 12:00am
UPDATED : Thursday, 06 April, 2000, 12:00am

Hong Kong's small and medium-sized enterprises (SMEs) lack the negotiating skills to help them save money on everyday business expenses, according to American Express and the Hong Kong Productivity Council.

In a survey, 57 per cent of 200 officials from SMEs interviewed felt their companies had little leverage in negotiating good arrangements with suppliers for everyday expenses.

Also, 89 per cent said day-to-day business costs would either remain stable or increase in the coming 12 months.

John Steward, American Express vice-president and general manager for Hong Kong, said one factor forcing up expenses was that SMEs had been unable to leverage against deflation in the market.

But he said business was starting to pick up and SMEs were starting to invest.

'With growing everyday business expenses and the expected increase in Internet usage and China business travel activities, it is more important than ever for SMEs to exercise better cost control and management of their expenses,' he said.

According to Mr Steward, SMEs have become mired in the way they have been managing their finances and suppliers have been slow to switch out of traditional invoicing methods.

Launching Amex's new business card dedicated to companies with less than 100 employees, Mr Steward said only 29 per cent of respondents used a charge or credit card for settling expenses, with the majority still preferring to use cash or cheques.

The new Amex charge card has no pre-set spending limit and cardmembers can make use of a quarterly management report with expenses categorised for easier expense management.

Members can also enjoy savings of up to 40 per cent on everyday business expenses, e-commerce and mainland business travel.