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12 tips to help SMBs select and manage vendors

12 tips to help SMBs select and manage vendors

Small business owners and experts share their strategies on how to build a successful, lasting partnership with suppliers/vendors.

“Ask for a trial period,” says Gordon. “You wouldn’t buy a new car without testing it out first, would you? Same is true for any provider you bring into your business. With your requirements list in hand, schedule a time for providers to walk you through the process/product. Once you’ve narrowed down to the top two or three that work best for your business, ask for a free trial period that will let you test the provider’s product or service,” he suggests. “Not only does this give you a feel for how effectively it will integrate into your operations, it will also allow you to get buy-in and feedback from your staff, who will [be] working with your provider.”

7. Vet the vendor’s customer service. “Finding out your vendor isn't available when you have to make a critical decision is frustrating,” or worse, says attorney Nicola H. Sodoma of Sodoma Law. So, before you seal the deal, find out “what is their average response time – is it the same day, hour or week? [And] ask how to reach them in case of emergency.”

[ Related: 10 ways multichannel companies can build trust with customers ]

8. Look for vendors who offer short-term or month-to-month contracts. “Choose the vendor that has the confidence to offer month-to-month contracts and not lean on a long term contract,” says Graham. “The result will be a vendor that works hard for you month-in and month-out rather than getting complacent knowing you have no way out of the contract for a long while.”

9. Carefully review all service-level agreements (SLAs) before signing. “When choosing a new vendor, it is important to make sure you fully understand the proposal or contract,” says Angie Stocklin, cofounder & COO, Sunglass Warehouse. “Ask clarifying questions and go through each line with a critical eye. And before signing a contract, ensure that the vendor fully understands your goals and is aligned on the results you’re asking them to achieve.”

Similarly, “find a vendor with a fee structure that works for you,” says Sodoma. “Make sure the contract does not have hidden fees or acceleration clauses. Be comfortable with the duration of the terms. What are you getting for your money? What happens if you are unhappy with the service?”

10. Regularly communicate with vendors. “Have suppliers build regular calls or emails into the project plan to ensure you are kept up-to-date on the progress of the project and can address any issues that may arise in a timely manner,” says Schoenfelder. “Regular communications can also aid in managing timelines and keeping your project on track.”

11. Treat your vendor how you want to be treated. “Always adhere to vendor management best practices,” says Stocklin. “Pay your bills on time. Be kind and respectful and reasonable with your requests. Set clear expectations. And give them a chance to correct problems.”

12. Know when to say goodbye. “Partnerships that have outgrown themselves or become unsuccessful can get expensive,” says Ian Small, CEO, Audiobooks.com. “Have a clear idea of when to cut ties, and make sure you’re able to walk away. This takes prior planning and the firm establishment of a fair termination clause to protect both parties.”

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