Table of Contents:
- Brenda’s bakery vendor journey
- How to find quality vendors
- Checking references
- Evaluating a vendor’s customer service and flexibility
- Know your vendor contact
- Vendor examples every business needs
- Price and value
- Don’t forget to negotiate
At this stage of the new business game, you’re ready to start picking star players off the bench to help you stay ahead of your competitors. And by star players, we mean operational partners and vendors. If you’re looking for that competitive edge, you need to pick only the best players, each bringing unique benefits to your business. And selecting a vendor, product or service-based; on price alone, won’t necessarily have a good outcome.
Brenda is feeling confident now as she takes the next few steps in her new venture as a cupcake connoisseur turned entrepreneur. But as her orders increase, she needs to find a more efficient way to buy bulk ingredients, manage her order capacity and make scaling easier. Down the road, she envisions her bakery products on store shelves and shipping directly to consumers across the USA. With so many directions and vendor partners to consider, this can be a daunting task.
A great place to source bulk ingredients for baking sweets is Webstaurantstore. If Brenda decides to ship to people’s houses, she will need to look at creating an account with USPS, UPS, or FedEx to get discounted pricing. She needs to make sure she acquires the proper software such as Xero.com or Quickbooks.com to keep her books accurate for inventory and costs, among other important initial software. We’ll get into this a bit later.
Let’s assume that Brenda reaches a point of max capacity for production; she would then need to explore partnering with a co-packer. Franz Bakery is a good choice for those who want to co-pack their cupcakes or baked goods in general. Just keep in mind that when partnering with a co-packer, you need to protect your intellectual property and/or any recipes to avoid theft.
If you relate to Brenda’s situation, below you will see a few considerations to follow, regardless of how big you desire to become as a company.
Quality of Product or Service
The last thing you ever want to do is partner with a schmuck vendor whose product or service lacks in quality. It could translate to delays on your end or, worse, poor quality and cause loss of clients. Before you enter any kind of agreement, do your due diligence on their finished products or delivered services. The best surgeons in the world don’t use subpar equipment in the operating room. Concrete contractors don’t lay sidewalks with low-quality cement. Who you use will need to meet or exceed the level of quality you offer. Anything less will make you look bad. Starting and growing your business is hard enough. You don’t need a shitty vendor to make things worse.
It’s important to check references before working with a vendor because you want to be sure that they’re reliable and trustworthy. Verify how long the company has been doing business. Read their Google and Facebook reviews, ask for past vendor clients who might be willing to share experiences. You’ll also want a vendor who will fulfill and keep their promise to you.
Customer Service & Flexibility
A dedicated vendor is one who is there for you through thick and thin, be it in the form of a SaaS, logistics, or raw material provider. When complications and challenges arise in business, this is where the true test of dependability and reliability comes into play on your vendor’s part. There will always be setbacks and hiccups along the way, but when it’s not your fault and perhaps the vendor’s fault, how do they react? What is their guarantee or policy if something doesn’t get sent out on time or is delivered in poor condition? Make sure you follow through on your due diligence and do plenty of question-asking with every single vendor you choose. At the end of the day, it just comes down to ethics and integrity from both sides.
Who Is Your Primary Vendor Contact?
Oftentimes, a great relationship can be created between the salesperson and you; after all, the job of that said salesperson is to make you feel amazing. However, that salesperson is not usually the contact you’ll work with moving forward. Avoid the bait-and-switch and ask to speak with the primary contact to get a feel for their energy and if you can see yourself creating a solid working relationship.
Vendors for Service-Based & Tangible Business Alike
While Brenda and Ryan are polar opposites when it comes to the type of businesses they run, they will still use a lot of the same software since the foundation of running a business in today’s world is fundamentally the same regardless of the industry.
Ryan, our newly established general contractor, realizes right away that he could use a better way to manage his construction bidding process. He also wishes there was a way to streamline his invoicing and communication efforts with his clients.
Brenda also realizes she needs to keep track of her inventory (raw material and finished goods), bookkeeping and have access to different automation software to make scaling her marketing efforts a lot easier. But both haven’t the slightest clue where to start.
Let’s take a look at what some of their viable options could be.
Job Progress: This is an all-in-one, cloud-based software specifically built for contractors by contractors. This allows contractors to manage from anywhere at any time. Management and teams can track, monitor, and measure a job site’s progress. It’s commonly used by builders, demolition and excavation companies, home remodeling, and general contracting companies—the perfect solution for Ryan.
Bakesmart: In Brenda’s scenario, she needs a little Bakesmart in her life. This software addresses everything from customizing cake designs to dominating eCommerce with baked goods. Manage transferring goods between locations, scale bakery production to accommodate seasonal peaks, or take your baked goods to 24/7 access, all with one convenient software. And it demonstrates the availability of niche software solutions for nearly any kind of business out there.
Monday: This is one of the many communication software tools that became even more popular during the pandemic. It’s designed to connect remote teams of workers in one convenient dashboard to manage projects, tasks, workflow, and communication efforts. This could be a good fit for Brenda since she could assemble a remote team to help with marketing, sales, and other administrative tasks.
Xero: An alternative to QuickBooks, this is one of the fastest-growing accounting software for small businesses. It’s a great tool for organizing finances, paying bills, streamlining invoices, and keeping up with quarterly tax preparations. Financial reporting is also available, making it much easier to keep an eye on seasonal trends and forecasting. The great thing is Xero and Quickbooks have native integrations with Job Progress or Monday. If you find that one software does not have a native integration, then you can usually connect your workflows through the APIs.
Vbout: Imagine MailChimp on steroids. This marketing automation software platform is exactly that! It’s a solution that enhances workflow, offers adaptive marketing automation, SMS, email templates, and more. The tools and templates are endless and a must-have for any business that has a long-term vision of scaling to seven figures plus in revenue per year.
Price vs. Value
Finding a vendor who offers value and affordability is essential for every company. Keep in mind that the value goes beyond the work that’s being done, but also in the relationship. Great human connection between both parties is what makes a successful partnership long-term. You can then apply the simple equation for ROI. If the investment with the vendor produces more revenue, it’s a win. Additionally, you can calculate how many new customers you would need to acquire to validate the initial partnership investment and know for certain that it’s worth it.
Don’t Forget to Negotiate
Every business is different, so naturally, the vendor roster will vary. But one consistent tip applicable to every vendor engagement is negotiation. Don’t hesitate to ask for added value extras, loyalty discounts, or better pricing. You don’t have to be a used car salesman about it, but inquiring about a vendor’s ability to negotiate is just good business.
Let’s say you’re getting into the property management business. And to protect your investment and take care of your tenants, you need a plumber and an electrician on-call for repairs and maintenance. Because you’re looking to partner long-term, those service providers might be willing to give you a discount because you would give them a steady flow of continuous work.
Or, let’s imagine you’re like Brenda, with her baked goods. She’s going to need a shit-ton of powdered sugar. She might be able to negotiate a better deal if she’s able to place automatic orders on a regular basis. If she finds a vendor that offers more than one of her needed ingredients, she could score huge discounts for ordering multiple batches.
Just remember, if you don’t ask for a better deal at all, the answer is always no.
As you explore your new vendor partnership options, keep these tips in mind. Make sure you’re aligning your business mission and your why with those who can support it best. And if you’re interested in some of the tools and software solutions that will take your business to the next level, connect with us and schedule a FREE consultation. We’ll work to help you cut through the clouded vendor space and find the right solutions you need.