Whatever your business, chances are you need relationships with other businesses in order to service your customers. Whether you are a general contractor who needs reliable subcontractors or a restaurant owner who needs a good fishmonger, the right vendors can make or break your company. That’s why it’s so important to use a methodical approach to selecting your suppliers and service providers.
-Start networking early. Everyone knows that you should actively network to help drive sales and referrals, but did you know that networking is also one of the best ways to find vendors?
Selecting a good vendor involves a lot more than just picking the lowest bid. Strong recommendations from your professional network can significantly improve your chances of picking a winner.
Monroe, N.C.-based interior designer Wanda Horton said, “My client projects are located in someone’s home, so it’s extremely important for me to vet any service vendor, not only for their expertise, but to be sure they will bring a sense of trust, support and advocacy to the project.“
-Write down requirements. Documenting your requirements doesn’t have to be a long, complicated process. You can use a short list of bullet points.
The most important things that a written list of requirements allows you to do is 1) be consistent in your communication to multiple candidates, and 2) be explicit about what is a “must have“ versus a “nice to have.“
Depending on your specific situation, it may make sense to ask for a base price to cover your must-have list and then line-item or modular pricing for each of your nice-to- haves. That way, when you go to compare several quotes, you don’t have to guess about what is included and excluded from each one.
-Spend face time (or FaceTime). If you’re seeking a commodity product, you may be able to simply collect quotes and choose the lowest one. But what kind of service will you get when something goes wrong? How responsive will your supplier be when you call about a late shipment or quality problems?
And especially for vendors with whom you’ll be working closely, be sure to spend some time with each candidate. If possible, don’t just interview them, but see if you can find ways to take the working relationship for a test drive. For example, when I was selecting a coach training vendor for a Fortune 100 company, we asked for one of their senior trainers to actually do a coaching session with a member of the selection committee. It was a great way to see the trainer in action, instead of listening to a lot of marketing talk.
It’s also a good idea to speak with past customers. Be wary of any vendor who can’t readily supply a list of references. Pay special attention to old customers who have been with the vendor for many years. Charlotte, N.C., floral designer Carolyn Shepard said, “Everyone needs to start somewhere, but do you really want to be someone’s guinea pig? Check out their online reviews as well.“
-Working with your winner. If all has gone well, you were able to source some strong candidates through your network, collect comparable bids through your requirements document, and find the right fit through talking to the candidates and their customer references.
Now take advantage of their expertise by collaborating with your vendor. Avoid micro-managing them, and invite their input into ways to make both of your businesses stronger. With a little luck, the relationship will be profitable for a long time to come.
Jennie Wong is an executive coach, author of the e-book “Ask the Mompreneur“ and the founder of the social shopping website CartCentric.com. Email her at TheJennieWonggmail.com.