You may have noticed over the last few months that the economy is changing and with that change comes a new dynamic in the way business is being done. Traditionally businesses were focussed on landing new clients, however the challenge is that it’s getting harder to find people and suppliers to maintain the capacity of your business.
I wanted to just go through a topic today, which I think is really, really important and quite often overlooked by business owners. A lot of people in business, in small business world, in big business world, they want us to rack how important it is to look after your customers. I completely agree with that.
But what often gets missed out, in terms of the discussion, is how important it is to look after your suppliers. Ultimately, a business is several components working well together, and that means you’ve got to have a good team. You’ve got to have good suppliers and you’ve got to have good customers. If you’re weak on any of those areas, your business is never going to achieve its full potential. It’s probably going to be quite stressful to run. Today’s video, I want to talk about supplier service, not customer service.
Looking after your suppliers is incredibly important and it’s even more important probably today or this year, than it’s ever been before. The reason for that is, if you were listening to one of my previous videos on the changes in the economy and the new budgets, then one of the things I essentially mentioned was that the economy is shifting. It’s all about higher value and high value and higher pricing. What that implies, and one of the reasons for that shift is because we’ve essentially now got a restriction in the amount of labor in our economy.
If you think about it, every single business for every single team member they have, has to generate more value than they’ve ever done. Partly because their own costs have gone up, partly because the team need to be paid more because the supply of team members has reduced, which means the price of the team members, as in their salary, has to go up. That cost then has to be passed on.
There’s less people in general to do stuff in our economy, which means, from looking at your suppliers and supplier point of view, it means it’s quite likely, there’s probably less suppliers in the economy to do stuff as well. What I mean by suppliers are, it could be your accountant, it could be someone that supplies your materials that you need to build your product. It could be your HR consultant, it could be your web developer and your SEO company.
Businesses, they tend not to do everything in house. They will often have suppliers assisting with multiple parts of their business. The idea is, because there’s a restriction in labor, then ultimately that will lead to restriction in the number of businesses out there that can actually provide a service. What I’m trying to get to with this video, is I’m trying to help people understand that if there’s less of something, they’ve got to work harder to acquire it and protect it.
For example, in the past, when you could have just shopped around for ages for an accountant, or you just shopped around for a marketing company to do your work, the good ones are probably fully booked for the next year or so. What I’m saying is, if you’ve got supplies in your business that do really a good job for you, or if you want to start working with someone who might not be working with you already, but they’ve got a good, really good reputation and you know your business needs them to grow to the next level and to deliver its full potential, then essentially court courting your supplier is just as wiring your customer. We all go out to impress our customers. We have the best service. We have the best packages. We go that extra mile just to add that value, but we are going to have to start looking the other way as well and start looking at how we can add value to the suppliers that we work with.
There’s a few things you can do to add value to your suppliers, because ultimately if you don’t add the value to your suppliers as well, they’re going to just go, they’re either going to go with the highest bidder, which isn’t good for you, because that means your prices will then go up or they’re going to essentially just not be able to do the work for you. They’ll find someone else who they prefer to work with. You’re always competing for supplier attention. You’re always competing for your team members. You’re always competing for your customers.
There’s a few things you can do to make your suppliers lives a lot easier. Firstly, just cooperate. If you are working with someone, it’s because you trust them. If they’re asking for something in particular, give them, unless it is got serious alarm bells ringing, then give them what they want. Don’t question it too much. Just trust they know what they’re doing. They want to get things done as efficiently as possible. Make sure the effort they spend goes into adding value for your business, not in terms of just covering the basic bits of the admin and information.
That’s how, that’s one way you can definitely help them. Another way you can help them is, introduce them to people. If you’ve got, if you know people who they can do business with, even though they might be really busy, but you know good people who make really good [inaudible 00:05:17] for them, then get them in touch. It’s the amount of goodwill generated when a supplier and a customer do make those introductions, is immense. It means you are taking your relationship to the next level. If you know, if you got suppliers in your business, people who are doing good jobs for you and other people that they can help, then make sure they’re in a position to help those people.
One of the other things is, don’t beat them down on price. It’s I mean, in the current economy, you probably won’t have much option anyway, because people are going to come back and say, “Well, the price is the price. This is what we have to charge to make our business work and pay our team.” Ultimately you’ll have to swallow it and you’ll have to then go back to your customers and say, “Well, the price is the price, this is what we need to charge to make our business work and pay our team.” It just rolls.
But ultimately, there’s a saying, “If you want to reduce a price, you have to reduce the delivery,” and I’ll do another video on this anyway, but the point being though is ultimately if you’re trying to beat them down on price, then you’ve got to be thinking, “Well, what out of their original proposition are they not going to deliver? What are they going to do slower? What are they going to do, not to the same standard. What are the issues involved in me having to get more involved, because they’re not giving me the attention they should, because they’re not making money off me that they should?”
I think finally, really, one of the really most important things is don’t just pay them on time, pay them early. Think about it this way, you owe a thousand pounds to someone for some web design tweaks. You get an invoice from them, it says, “Okay, well this invoice needs to be settled within four weeks.” What are you achieving by waiting four weeks to settle that invoice? If you’re… I know some businesses have to do this, because their cash flows are so tight, but that’s a whole other issue. But if your cash flows aren’t so tight that you’re robbing Peter to pay Paul, then why have that money just sitting around in your bank account? Do you understand the amount of goodwill it creates with your supplier, just to actually pay them on time or early? Actually don’t even pay them on time, pay them early, always pay them early.
For our business, we settle an invoice within two hours of receiving it. That’s sometimes you can go up to a day depending on from meetings, but our goal has always been get that invoice sorted within two hours, because the amount of good work that creates with our suppliers has been astronomical. It’s been a huge part of our business’ journey and our business’ success because we work with suppliers who will literally drop what they’re doing to support us when we need it. That’s been incredibly important, just maintaining our tempo of operations.
If I could just summarize, the main things are, be easy to work with, make sure you’re introducing good suppliers to good people, make sure you’re paying the right amount and you’re not getting beat, you’re not beating them down in price, and also make sure you’re paying them early. Not on time, paying them early. What I’d like you to do, is just reflect on this. If you feel that this is an ethos you can apply in your own business, then I’d love to hear back from you.
Or even if you just want some other advice in terms of growing your business, building into that million pound business, then we’re as an accountancy firm, that also specializes in business development, we are the people to help you get to that million pound business. Get in touch, book yourself in for a strategy session. If you liked this video, please remember to like, share, and follow and subscribe if depending on how you’re watching it. I’ll see you in the next video. All right, have a great day. Bye.