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Business success relies on building strong working relationships, not only with your customers but with the suppliers you rely on to keep your business running smoothly. Your supplier relationships can play a pivotal role in your company’s longevity and growth.
But how do you manage supplier relationships? We’ve put together this guide which explains how building deep supplier relationships can improve your chances of business success.
Understanding the significance of supplier relationships
Very few businesses are completely self-contained. Most rely on suppliers to help them deliver their products and services to customers. Such businesses stand or fall on building strong relationships with those suppliers, for example:
An IT company manufacturer cannot operate without suppliers of the many raw materials from which its PCs and smartphones are made.
A coffee shop cannot open its doors without a solid stockpile of different coffee beans, milks and syrups.
You can be sure a printer’s stockroom will be filled with rolls of paper, canisters of ink and spare parts: all sourced, of course, from suppliers.
The higher the quality of the products and services provided by a company’s suppliers, the greater competitive advantage they will enjoy in the marketplace.
But how do you find these crucial partners? You may find some via referral from colleagues, employers or even competitors. You may have worked with a supplier in a previous job and still have them stored in your contacts. Alternatively, a third party broker is a great place to look. A decent broker will not just provide a blank advertising space but instead vet the professionals they advertise to their customers to ensure the best service possible.
Business Support Club or BSC was established to provide exactly this service to startup owners like you. Our marketplace provides a rich catalogue of small business suppliers for every need.
How to build deep supplier relationships: the foundations
Read on to learn more about building deep supplier relationships and ways to work together that will ensure valuable business growth.
Building trust
Building trust with business suppliers is a two way process. You have to trust them, but it is equally important that they trust you. A supplier who feels confident they will be treated fairly and paid on time is one that is more likely to go above and beyond in ways that will benefit your business.
Before you begin work with a particular supplier, make sure there’s at least some harmony between their working culture and yours, and between your preferred business model and theirs. If you are a business that prioritises agile working and flexibility, for example, you might struggle to find common ground with a very process-focused, hierarchical supplier. Similarly, your business models may clash, from invoicing patterns, to payment terms.
Make sure to discuss these issues with potential new suppliers first, before you pull the trigger on that first contract. Then work on establishing a solid track record of successful transactions to build and solidify mutual confidence and business trust.
Effective Communication
Effective communication is more than dialling a number or sending an email. It is quite possible to do both and get nowhere. Effective communication is a phone call or email that achieves its purpose and generates the result you want.
The starting point for effective communication is the trust we discussed above. A good grounding in the culture of your supplier will make it easier for you to raise issues and concerns or discuss changes, because you will be able to frame these in ways you know have a greater chance of success.
The best business communications strike a balance between clarity and civility. There should be no doubts about the meaning behind your messages, and a willingness to work with the supplier to resolve any problems should also be clear.
Effective communication is a two way process. Your suppliers must feel free to come to you with any issues or concerns, just as you communicate concerns to them when necessary. Just as in personal relationships, a supplier who feels listened to will be more motivated to go above and beyond. Encourage feedback and the exchange of ideas.
Transparency
Transparency is an important component of both trust and communication in business. A sense that things are being concealed from us without a clear reason can undermine confidence in our relationships.
But it’s important to note that in a business setting transparency doesn’t mean casually broadcasting confidential commercial information! It simply means not being unnecessarily secretive about data and figures relevant to your transactions with the supplier. Establish good practice amongst your employees and let your suppliers have the information they need when they need it. This will build a sense of trust that will both benefit your operations and enhance your reputation.
Best practices for business relationship management
Here are some best practices to follow to help you build deep supplier relationships:
Define the nature of your relationship with each supplier. Do you work directly with the supplier or via an intermediary? Do you and the supplier work in the same industry? Do they provide a valuable service - or merely a convenient one?
Ensure your staff are properly trained in the importance of good supplier relationships. Encourage them to get to know employees of the supplier and to be as courteous and fair-minded in the dealings with suppliers as they are with customers.
Think of your supplier relationships as a mutually beneficial exchange of resources and value. They are partners in your success, not disposable commodities. Ensure your staff understand this too. Offer help where it might be needed.
Don’t be phoney. Good business relationships are built on trust and confidence and if your suppliers are not confident you are who you claim to be, they will feel less inclined to continue working with you.
Be courteous. Express gratitude for a job well done. Affirmations build loyalty and business bonds.
Be proactive. Get in touch with at least your biggest suppliers on a regular basis and ask for their views and input.
What about technology?
Technology can be a valuable tool when developing supplier relationships. For example:
The many rich communication channels available make connections between key staff members quicker and easier to maintain.
Online invoicing and payments can improve speed and transparency.
Video conferencing can help to maintain that important human, face-to-face connection and boost the personal links that lie behind the business relationship.
How do you know when you’ve achieved a deep supplier relationship?
The process of building deep supplier relationships begins with the initial choices you make: who you choose to work with and how you choose to work with them. If you make good choices and set lasting precedents, you will do good business and enjoy lasting relationships with the suppliers you choose to work with.
Here are a few indicators that your supplier relationships are strong and have the potential to last:
You know several employees of the supplier personally.
You have both made long term commitments to continue working together.
Your business goals are aligned and you have a strong track record of collaboration.
The key performance indicators or KPIs for supplier projects are strong and consistent.
To conclude…
There’s no doubt that successful relationships lie at the heart of all businesses.
Our marketplace was established to help startup entrepreneurs just like you forge these crucial relationships. Check out our marketplace and choose a comprehensive catalogue of service offerings designed to cater to startups of every size and industry. Creating a BSC account is quick and easy - explore the business marketplace or browse our services today.