A businessman shakes hands with a trusted vendor in a small business consulting meeting.

THE IMPORTANCE OF TRUSTED VENDORS

Throughout my career I’ve worked with my fair share of vendors I later wished I hadn’t. I’ve been promised the world – only to be let down months later. And even worse, at times I’ve been completely lied to and essentially “robbed”. And that sucks when that happens. With that said – I have found some good ones along the way.😊

When you are talking about a change of vendors for something like copy paper (assuming there are no special requirements), no big deal. You simply place your next order somewhere else and when you have your inevitable first issue –  you know whether you are in good hands or not. This takes no more time than deciding who to place the next order with, and price can be an easy determining factor. But what about when the vendor is a critical part of your business? These types of vendor changes can be extremely time consuming. And more often than not – NOT changing gets even MORE costly!

examples of time consuming & costly vendor changes

  • IT companies
  • Web developers and web platforms
  • Manufacturing facilities
  • Main suppliers of products
  • Accountants
  • HR services
  • And the list goes on….

One main challenge is the time it takes to do your due diligence in making one of these high-level vendor changes. You may need to completely document and explain your values, processes and expected outcomes. For something like changing your IT company or web developer this can get fairly in depth and time consuming to do it right. 

On the flip side of the coin (and in my experience) – sometimes no amount of front-end time investment can truly ensure your company will be in good hands. It takes time to work through kinks to know you are in good hands with a true partner. 

Having trusted vendors (or “partners” as I call them) is critical to success of any organization. Let’s start by outlining some of the major problems associated with subpar business vendors.

Problems associated with poor vendor management

  1. Lack of trust
  2. Misunderstandings of who does what
  3. No clear expectations on either side
  4. Poor communication
  5. Late deadlines
  6. Inefficiency runs amuck
  7. Lack of personal, or company-wide responsibility
  8. Increased costs
  9. Upset employees, customers and vendors
  10. Feeling “stuck” and letting fear of change causing even more harm
  11. And the list goes on…

CASE STUDY - TRUSTED VENDORS ARE TRUE PARTNERS

I have worked with Justin Baldwin and his agency Baldwin & Co. Accounting for over 10 years. I originally met him in Oklahoma City when I was the GM at a new start-up company. We moved that company to Nashville, TN a couple years after in 2012 and continued working with Justin after that – fully remote.

I sold out of this company almost 3 years ago and moved back to my home state of NH.  Yet, the company continued to work with Justin’s firm and still does. And I have continued to work with Justin since that time as well for all of my personal, business and client tax needs.  He taught me just about everything I know about accounting and Quickbooks starting back in 2010.  I truly consider him a mentor and trusted advisor and it’s why I list Justin’s firm as my “Accounting Partner” for Birch And Oak. This brought up some questions:

  1. Why have I worked with Justin’s firm for so long?
  2. Why is it I have 100% confidence in this firm?
  3. Why have I not even considered trying someone else, or a local accountant?
  4. Is there a bigger underlying factor that’s at work other than “he’s a CPA you can call”?

These questions led to a quick Q&A session with my friend and vetted accounting partner at Birch And Oak. And some interesting takeaways came out of it…

BR: Justin – With such a large skillset and service offering, what are your favorite areas of your business?

     JB: I would say my favorite part of accounting is being a continual partner with clients as they wade through cash flow management, taxes, financial leadership and succession planning. I enjoy fostering financial literacy through frequent communication. 

BR: I noticed you said “being a continual partner” before you mentioned anything to do with accounting. Can you elaborate a little on what you mean by that?

     JB: I use the term “continual partner” as I always plan for it to be a long-term, mutually-beneficial relationship that springs from each new client engagement.

BR: This seems like a bold statement this day and age. With no shortage of providers for accounting services (or any other service for that matter) can we drill down a little into how you accomplish this?

     JB: Truly being a trusted advisor means having the honor to work with them as their business grows, or as it shrinks which undoubtedly occurs over the life of even the most successful enterprise.

BR: What does an ideal “partnership” look like to you and what do you do to ensure this happens?

     JB: Frequent communication cultivates important dialogue that aligns the entire financial plan, from tax planning to optimum cash flow management.  The more clients know, the better questions they can ask and the deeper dive we can make in growing their business while being tax-efficient. 

BR: Why is frequent communication so important to becoming a trusted advisor and partner?

     JB: Oftentimes, the most meaningful conversations I have with clients are when they are at their darkest hour (literally as the power bill cannot be paid) financially and all seems lost. Without trust – I don’t get an opportunity to help there as the accountant is considered an expense vs. an investment. 

BR: Those have to be tough conversations to have with anyone. How do you wade through those muddy waters?

     JB: During times like those, being a financial counselor is important but being an encourager and trusted confidant is paramount to coming out stronger on the other side.  Going through times like those are tough, but in the end makes them, and myself better business leaders. 

BR: What’s the end goal with any client relationship?

     JB: If successful in our mutual cause, the arc of the relationship will ultimately bring us to succession planning, evaluation of the business value and estate planning. If we got the basics done consistently over the years – this is where my clients reap the rewards. This is what I love seeing, and it keeps me doing what I am doing.  

BR: Are you currently looking to bring on more clients for bookkeeping and accounting services?

     JB: Yes. We are always interested in expanding our client profile. The more people we can help the better!

BR: It was great when we first met and I lived in OKC. If I had a question you could just come by and hold my hand through the process if needed. But are there any challenges servicing out of state customers?

     JB: With so many services being cloud based (including Qb online) we can service clients all over the country.  And with Zoom/Google Meets, having long distance meetings is quick, easy and effective.

Here are some of the main takeaways from this little Q & A session:

  • Justin unintentionally explained why I have worked with him for so long, and why a trusted partner is so important.
  • It is not easy to find a trusted partner – your average bear is focused on profit, not integrity.
  • It takes A LOT for me to put my seal of approval on any person or firm. Ten years (and counting) without an issue that could not be easily resolved is pretty amazing.  
  • I feel fully confident placing a client in his hands. Therefore – he is my vetted and trusted partner. 

How TO know you have a trusted vendor

  1. You are excited to work with them
  2. You have a mutually beneficial agreement
  3. You both feel like a priority
  4. There is transparency in tasks
  5. A feeling of synergy working together
  6. You benefit from each other’s ideas
  7. A continual sense of achievement
  8. A sense of teamwork and collaboration when handling issues

Essentially, when you have a vendor that gets things done when they say they will at the price agreed to upfront, admits when they made a mistake and resolves it for you, and offers tips for improvement – you have a winning combination.

Benefits of trusted business vendors

  1. Ability to focus on your business operations – not someone else’s
  2. Increased efficiency
  3. Improved quality of services or products which the vendor provides
  4. Reduction in costs
  5. Better communication
  6. Integrity and personal responsibility run amuck
  7. Customer happiness

Bottom line is – take your time finding your vendors. Ask your trusted vendors and other business owners for recommendations. Do your due diligence by asking the right questions before taking a blind leap of faith. And make sure you have your ducks in a row from a documentation and expectations standpoint. For vendors critical to your operations, this may mean creating a vendor compliance manual. 

Finally – realize when you are at a point of diminishing returns with a current vendor. The real costs start adding up with unnecessary internal labor costs, disgruntled employees, vendors and customers. It’s no more fun for your vendor than it is for you when the partnership isn’t working out. Taking responsibility for a bad partnership means admitting it and changing accordingly. Having a change plan to minimize disruption can help moving forward. 

I’m striving to create a larger network of trusted professionals to help small businesses. You can find my shortlist of trusted partners by clicking here.

~Brian

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