A quick guide to nurturing professional relationships for long-term growth and success.
Entrepreneurs spend a lot of time building relationships with their customers and employees. However, they often overlook the value of maintaining positive relationships with vendors.
You and your vendors must understand each other’s business goals and need to succeed. This holds even more relevance when several internal and external factors severely impact businesses. Supply chain challenges, labor issues, and material shortages disrupt normal business operations. At the same time, political upheavals, competitors, customers, and the environment influence the organization’s performance.
Here are six strategies to manage and nurture resilient suppliers.
1. Evaluate your vendor ecosystem
Start by carrying out a thorough assessment of your existing vendor ecosystem. This will help you understand the challenges your small business faces. Additionally, it will guide how you should develop and support partners toward building a more robust network for the future.
2. Get to know your vendors
Take the time to understand your vendors’ challenges, pains, and fears. At the same time, be sure to share your thoughts and exchange ideas. Doing so will help foster a strong bond that can positively influence future business interactions. Spending time now can lead to valuable insights and pay dividends in the future.
3. Build win-win situations
Vendors operate to achieve their commercial objectives. While generating revenue with a favorable profit margin is critical, they may also prioritize other factors to build strong relationships. For instance, being a reference customer might hold more value for the vendor than securing a higher service margin. Ensure that any such opportunity is leveraged to create win-win situations.
4. Maintain strong and regular communication
Regularly update vendors on your plans and be proactive in seeking their assistance. Clear and frequent communication ensures alignment and collaboration toward shared objectives.
Additionally, ensure that open communication is maintained, especially during challenges. Inform your vendors about the impact of late deliveries or quality issues. Collaborative efforts strengthen your partnership, fostering vendor support during difficult times.
5. Consider making vendor relationship agreements
Consider creating a vendor relationship agreement if you buy from a vendor regularly. It’s different from a regular pricing and product agreement. It includes items like a joint mission statement of your partnership, pricing options, delivery plans, payment terms, communication protocols, periodic reviews, and team engagements.
A well-documented vendor relationship agreement can serve as your guide, reducing the chances of confusion or disputes and enhancing your relationship with vendors.
6. Encourage vendors to assist in strategy-building
Consider sharing your technology roadmap with vendors and work with their resources to fine-tune your strategies. This collaborative approach will significantly enhance your ability to adapt and innovate in the rapidly evolving technological landscape.
The final word
Want to know more about risk management for your small business? Since 2006, Escalon has helped thousands of startups get off the ground with our back-office solutions for accounting, bookkeeping, taxes, HR, payroll, insurance, and recruiting — and we can help yours, too. Talk to an expert today.
Having resilient and reliable vendors is indispensable. They can help your small business thrive amid global challenges while providing long-term opportunities. Use the above mentioned strategies to bolster supplier relationships for sustained growth and success.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.