Treat Vendors as Assets

Vendors and independent contractors can be critical to your small business success

 

For many businesses, doing everything in-house simply is not an option. If this is true in your business, be sure to treat vendors and independent contractors as you would any employee: with respect, communication, and trust.
Vendors and independent contractors can be valuable parts of any business team. If vendors are critical to your company’s success, be sure to treat them as the assets they are:

 

  • Most businesses cannot fulfill every function in-house; vendors and independent contractors are there to fill these gaps.
  • The key to building strong relationships with vendors is to treat them with respect and trust just like you would an employee.
  • Open and clear communication is also essential to maintaining successful vendor relationships.
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For most businesses – especially small businesses – it simply is not realistic to fulfill every function in-house. This is where vendors and independent contractors come into play.

Vendors and independent contractors can step in to fill the voids in your operational processes. Oftentimes these are functions that would be executed by employees in a larger company, but in a small- or medium-sized business, can sometimes be more cost-effectively performed on an as-needed basis by an outside contractor.

Perhaps your company hires an outside CPA that acts in the same capacity as an employee controller might, or partners with a printing company that performs a function that an employee in operations would normally undertake. Though these vendors may not be employees, they are still essential parts of your team and should be treated like the assets they are.

The three keys to building strong relationships with your vendors and independent contractors are to treat them with respect and trust, and to maintain open lines of communication.

 

 

  1. Respect your vendors the same way you would an employee. Treat their time as valuable, and recognize the value of the products or services they provide to your company. Just as with an employee, a little positive reinforcement goes a long way. Let them know that they are a valued member of your team.
  2. Build on your relationship with trust. In order to put your trust in the right place, don’t just go with the first vendor you come across – spend the necessary time to research vendor options and choose someone that it worthy of that trust. But once they are chosen, don’t micromanage or go on the defensive. Show your vendors that you trust them to come through and deliver, and more often than not, they will.
  3. Finally, communication is key. Be upfront about your expectations to give vendors and contractors the information they need to succeed. And especially when it comes to payment, leverage the trust you’ve built and be open about communication. If you cannot pay in a timely manner, explain your circumstances and make payment arrangements with them, then keep in touch. Even partial payments with strong communication (as opposed to no payment and silence) can go a long way toward maintaining a solid vendor relationship.
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In short, vendors may control critical aspects of your delivery process. If that’s the case for your business, make certain that these key players are treated with respect and trust, and your company can reap the benefits of strong vendor relationships for many years to come.

 

 

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About the author

Alex Hart

Alexander J. Hart of Cuban American decent is principal and founder of Hart Vida Raffo. With over 25 years of experience, Alex specializes in the areas of tax strategy and planning, business process improvement, and capital consulting. Whether advising on capital and financing strategy or consulting for privately-held professional services firms, Alex has the expertise and practical know-how to help any company optimize their business processes and make tactical financial decisions. He began his career at IBM in sales operations and accounting. He was a Controller for the N.Y. Post, has been a CFO for a medical device company, and has written a tax column called “Ask the Tax Guys” for Micro-Cap Review. Alex is a professional member of A.L.T.A. (Affiliated Lawyers of the Americas), a member of the National Association of Tax Preparers, and is a contributing author and mentor at Latin Business Today. Alex graduated from St. John’s University with a B.A. in Spanish and his M.B.A. in Finance. He obtained his accounting degree from Pace University.

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