If your business depends on suppliers to produce products or offer services, evaluate the effectiveness of your relationships with current suppliers. Your new business strategy may involve establishing new supplier relationships. If so, you will spend a lot of time planning your business and working towards achieving your vision. Do not risk your success on the performance of an unknown supplier.
One way you can improve your chances of finding good suppliers is to create a supplier-selection process. Ask and answer these questions before you set up any long-term relationship with a supplier:
- Who else does this supplier do business with?
- What is the supplier’s strategic plan?
- How is the company doing financially?
- What alternative companies should we consider?
If companies want to do business with you, they may be willing to provide basic financial information to help you evaluate their long-term viability. If they are not willing to provide this information, you can check on their credit ratings or obtain information from the Better Business Bureau or commercial rating agencies such as Dun & Bradstreet®. Don’t ignore what you find out. It may mean the difference between success and failure.
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