I don’t know about you, but I like to do extensive research before I invest hard-earned money on a new purchase. I know I am not the only one like this, because when I was recently shopping for a new TV, others beside me were taking smartphone pictures of the various models, just like I was doing.
Like me, too, they were researching prices, availability and reviews online. Beyond those tasks, I also surveyed friends and family -- even salespeople - to see what brand, make, model and size TV they thought was the best buy. I was being as careful as possible so I wouldn’t make a big mistake.
We all do this to a certain extent, I think, when choosing most any large personal purchase, whether they be a TV, washing machine or car. And we do the same as entrepreneurs and managers, making sure we are spending our company’s money wisely.
But there is an area that needs our attention and has the potential to make or break our business more than any other single purchase: choosing the right vendor partners.
We all use vendors to help us run our business, whether a vendor is an SEO company, graphic designer, accounting firm, the printer of our marketing or event materials, our internet service provider or even the answering service we hired; vendors can make us look good or bad, and they have a huge impact on our company’s success.
But, how many of us put forth the effort we use in choosing that new TV or car into choosing a vendor? What criteria do you yourself use? Does the vendor (or subcontractor or partner) align with your business core values? Do you check references?
Do you ask for referrals from other businesses that have used this vendor? Do you check social media to to check for online reviews? Do you check with the local BBB, or Google the name to see what comes up?
It’s amazing to me how little business owners sometimes know about their own vendors’ businesses and their reputations. Think about your current vendors and ask yourself how much you know about each and every one.
What do you know about their financial situation? Are you happy with their service and do you feel 100 percent secure that in an emergency these vendors will step up and do the right thing by you and for your customers? Or, are you a little nervous that they will drop the ball, putting you and your business’ reputation at risk?
As a business owner, you have a responsibility to make sure your vendors are an extension of your business, and that they act accordingly. They should understand that what you require is not a request, but a necessity, if they want to do business with you.
I work with a very successful business owner who practices this philosophy. His name is Mike Agugliaro and he is the co-founder of Gold Medal Service, one of the most successful home-service businesses in the country. He is also the owner of CEO Warrior, a coaching business that guides struggling service businesses to become successful and profitable businesses. One of his business strategies is choosing vendors with care, and holding them to his own high business standards. He does this in several ways that he offers as tips:
- Make sure the vendor you are considering is a cultural fit. Does this vendor’s beliefs mesh with your business beliefs, and do you connect on a visionary level?
- Create a service level agreement (SLA). Mike’s SLA states what he expects from his vendors, how they will act, dress, work and conduct business on his behalf. His vendors sign this agreement so there is no question as to what the relationship requires.
- Require vendors to fill out and sign a follow-up sheet. A follow-up sheet, which each vendor fills out and signs, contains a check-list to help vendors self-evaluate whether they have finished the work according to the agreement. The list also gives Mike a way to manage and rate his vendors’ performance just as he would do that of his employees.
Mike says he considers his vendors a part of his team and expects his employees to treat them as such. But this regard goes both ways. Vendors are expected to play by the rules Mike has set out in writing.
Before you trust your own business to an unknown, or little-known, vendor or subcontractor, put in the work necessary to do it right the first time.
And if a vendor fails to live up to your expectations, don’t hesitate to let him or her know it. Having a written agreement with the specifics about the partnership will ensure that you both know what is expected.