Small and growing businesses often depend on outside sources to provide products and services. From the supplier that provides raw materials, to the company’s marketing agency, vendors are critical to business, and good vendors are critical to business success.

Whether your vendors are in place, or you’re just starting your search, here are some steps that may help connect you to the right vendor for your business.

1. Define your objectives and put them in writing. What are your expectations of a vendor? What are the success milestones? What are your top priorities?  Many growing businesses select vendors based on cost alone because the bottom line is still growing and every dollar counts. However, consider other aspects of vendor relationships. From reliability to being able to talk to the owner directly, determine what’s important to you besides the price.

2. Talk discounts. If you regularly give repeat business to the same vendor, that vendor doesn’t have to spend marketing money recruiting your company.  In other words, vendors make more profit from regular customers. Ask for and expect discounts for the regular revenue your company creates for vendors, suppliers and sub-contractors.

3. Conduct deep research. Chances are, any prospective vendor has a website, and if they don’t, they probably aren’t the vendor for you. Visit the web site. Is it professional? Does it fit your company’s values and meet expectations? If not, move to the next vendor on your list.

Ask business associates for referrals. Vendors recommending other vendors? A sub-contractor recommending a fabricator? These professional referrals can steer you away from trouble and direct you to companies with good local reputations.

4. Call the vendor. Conduct a test run. Call the company. Does a human answer the phone? How quickly do you get to the service rep, or a knowledgeable decision-maker?

If you get stuck in an endless phone tree, or if the reps are more interested in selling you rather than helping you, consider a more client-centric approach from the vendor you choose. You can learn a lot as a “customer.”

5. Place a small order or assign a small job. Evaluate each company on your short list with a test order and post-sale support. You’ll have first-hand input to better evaluate prospective vendors.  How does the ad agency handle the design of a brochure? Hit all deadlines? Great graphics?

Does the order ship on time? Arrive in good shape? Is tech support a phone call away?

6. Ask vendors to get involved. Some businesses keep vendors at arm’s length, communicating only to place orders or conduct business as usual.  However, vendors can also be sources of valuable information – from the latest trends to an industry slowdown.

A vendor knows your industry from a slightly different perspective – a perspective you can develop through discussions, consultations, and business meetings. Look for pro-active vendors who offer consultation as part of the order.

7. Consider location. It’s nice to stop by the supplier’s place of business. Shipping costs drop when vendors are just up the street. Meeting face-to-face is more convenient when vendors are in the neighborhood. Review your list of expectations to determine which would benefit from having a nearby vendor – a vendor who can deliver today.

8. When it isn’t working out, change vendors. It may be difficult to switch from a long-time vendor to a new supplier that charges less, but you have a business to grow. If orders are late, the invoice is wrong, the wrong products are shipped – it’s time to look for a new vendor. Conduct your research, make a well-considered choice, and get back to business.

Choosing vendors is an important part of business success. Good suppliers and subs can help small businesses grow into big businesses. Unreliable vendors can hurt a business.

Choose with care the vendors your company selects, and don’t be afraid to change vendors who don’t meet your expectations.

 


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC