HOW TO CHOOSE THE RIGHT SUPPLIER FOR YOUR BUSINESS

Over the past few months, I must have heard 20 stories of small business owners who at best have been disappointed with the performance of one or more of their suppliers. And at worst did not receive the service they paid for and were ripped-off. I often get asked the question: how do you choose the right supplier for your business?

How To Choose The Right Supplier For Your Business

As small business owners, operating under tough financial constraints, we’re often not in a position to recruit an in-house team(s) to deliver services for us or it just wouldn’t be sensible to do so. If our bookkeeping takes just a few hours a week, it makes far more sense to get a professional bookkeeper to keep our financial records up to date. Until our turnover exceeds £1,000,000, we probably don’t need a Finance Director. For specialist marketing activities like PR, paid advertising and SEO, it makes far more sense to bring in a professional to deliver the service.

But how do you choose a competent and reliable supplier, especially when it’s for a technical area? This was something I struggled with as a new CEO. In my first six months, I had to find a new outsourced Finance Director, an auditor, an IT supplier to install and manage a new system and a recruitment agency.

Websites are a particular problem area. Off the top of my head, I can think of four business associates who commissioned a website last year and 12 months on, the website provided is still not fit for purpose. In a couple of instances, the website provided was so poor that it cannot be used. Whilst you have legal rights to a full or partial refund, depending on the circumstances of your case, this does not compensate for the ‘lost opportunity’ cost. Lost time, lost revenue, lost life time value of potential customers who've gone to one of your competitors...

So when it comes to choosing the right supplier for your business, what should you look for?

What Should You Look For In A Supplier?

When it comes to selecting the right supplier, there are 6 key attributes. This isn’t a complete list, but it’ll get you a long way.

  1. Reliability - If they let you down once without good reason, they’re likely to do so again. This in turn may mean you end up letting your customers down too.
  2. Quality – If the quality of your suppliers' communications and content aren't polished and consistent from the get-go, it’s likely to be sloppy going forward. Remember, your customers associate poor quality with you, not with your suppliers.
  3. Value For Money - The lowest price is not always the best value for money. In fact, very often it isn’t. If you want reliability and quality, you’ve got to decide how much you're willing to pay and be prepared to strike a realistic balance between cost, reliability, quality and service. If a quote is markedly less than ones you’ve received from competitors, the chances are that supplier will struggle to deliver a quality service. Put another way, if a deal sounds like it’s too good to be true, it probably is.
  4. Strong Customer Service and Effective Communication – Mistakes happen, but a good supplier is focused on delivering excellent customer service. If for example, they can’t deliver on time, a good supplier will be honest and give you plenty of warning they can't. The best suppliers will want to talk with you regularly to find out what needs you have and how they can serve you better.
  5. A Partnership Approach - A strong relationship will benefit both sides. You want your suppliers to acknowledge how important your business is to them, so they make every effort to provide the best service possible. And you're more likely to create this response by showing your supplier how important they are to your business.
  6. Financial Security - It's always worth making sure your supplier has sufficiently strong cash flow to deliver what you want, when you need it. Pay particular attention to discounting and pushy sales strategies. These can sometimes be an indication of cash flow problems.

[callout]CLICK HERE to start planning your business 2017 budget and map out your financial plan for the year ahead.[/callout]

How Do You Choose The Right Supplier For Your Business?

  • Seek recommendations from across your network.
  • Check out the digital footprint of those recommended – their website, LinkedIn, social media, recommendations and reviews. Look for independent testimonials e.g. on LinkedIn, Checkatrade etc. Don’t trust other people to have done their due diligence.
  • Draw up a shortlist of suppliers. Use your common sense. If you're looking for an agency to manage your social media, and they don't use all the key channels consistently and well themselves, don't shortlist them. If you're looking for a PR agency and they can't get publicity for themselves and/ or prove that they've got good PR for their clients, don't shortlist them.
  • Check that they do work with small businesses and their pricing strategy reflects this.
  • Set out in writing your requirements.
  • Invite suppliers on your shortlist to 'tender' for your work. Be clear what information you want them to provide before you start a conversation. Don't make this so onerous as to be unreasonable, but do request sufficient information so that any subsequent conversation is worth your time and their time. If you're looking for a branding, website, PR or social media expert, you could ask them to send you the name one or more projects or campaigns they're most proud of with relevant links.
  • Not everybody on your shortlist will respond. Good.
  • Evaluate the responses you receive against your list of requirements.
  • Remember you're in control of this process. It's NOT a sales process even though the supplier will be doing their best to 'sell’ their service to you. If you don't understand what the person is saying, don't select them.
  • Be mindful of anybody who is good at sales. This tells you that they're skilled at sales conversation. It doesn't mean they're good at the task you want done. Likewise be mindful that if you really like somebody, you’re more likely to unconsciously skew your questions to reflect this. The best service provider is not necessarily the best sales person or most likeable person. Although they may be.
  • Pay attention to cultural fit. Because a provider works brilliantly with an associate does not mean they're right for you. You might have very different cultural values.
  • Pay particular attention to customer service. What can you glean about customer service from the way a potential supplier deals with you? Suppliers make mistakes. Sometimes we haven’t articulated our wishes clearly enough. But where I’ve sacked a supplier myself, more often than not it’s been because of an epic customer service failure.
  • Get help from somebody who has technical knowledge or expertise you lack. Failing that, ask somebody with sound common sense and good judgement if they can help you select a supplier.

Wow, This Is A Lot!

Yes, it is. There’s a lot to take into consideration when it comes to choosing the right supplier for your business. But these are your hard earned bucks, and an important investment in the future of your business. Get this right, and you will have a long-term business partner who you can grow with. And who will help you to grow your business.

Rush the process of finding the right supplier and you’ll waste money - possibly paying for work to be re-done. But more important, you lose valuable time that you can't get back. And lost time means lost revenue.

[callout]CLICK HERE to start planning your business 2017 budget and map out your financial plan for the year ahead.[/callout]

Join The Conversation

Question: Have you experienced a problem with a supplier? Were you able to get it resolved to your satisfaction? I love reading your feedback so please do reply using the comments box below.

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I’m Denyse Whillier, a London based business coach and consultant. I guide entrepreneurs from across the globe to achieve profitable, scaleable growth and create businesses that are Built To Succeed™. Built To Succeed™ is my proven success system, developed during my 8 years in the trenches as a CEO, 25 years’ experience at senior leadership and managerial level and training at Cranfield School of Management, the UK's leading business school. It's this background that sets me apart and helps my clients to get BIG results.

I’d love to start a conversation. Simply use this link to arrange an informal Skype coffee chat. There’s no hard sell. Just solid advice and a straightforward, honest assessment of whether 1:1 business coaching (or business consultancy) would be a good fit for your business, the results you can expect and how to get started.

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