Forging Small Business Relationships with Vendors and Suppliers – Small Business Show 171

The Small business show episode 171 for Wednesday, May 16, 2018. Greetings, folks, and welcome to the Small Business show here at BusinessShow Co, the show that is by, for and about small business owners here in Durham, New Hampshire. I'm Dave Hamilton.

And in Lafayette, California, I am Shannon Jean. I really love that Bifornabout bfa, man.

Bfa.

That's it.

Biforn about.

Bfa. Biforn about. That's really a good tagline.

I want to let folks know right up front. Oftentimes we say it at the end, but if you want to send us any feedback or anything. Feedbackusinessshow.co we love hearing from you. We love answering your questions. We love all of that stuff. The interaction is a huge part of what makes this work for us.

So, so, oh, yeah, that's really good. And also, I'll just chime in and, you know, we want you to come on the show. We want you to come on the show and talk about your business and talk about what's worked for you. Maybe, you know, what challenges you face or just tell your story and you could, you know, connect with us just like Dave's talking about. Feedbackusinessshow co we would love to hear from you or referral to someone you think we should talk to on the show.

Absolutely, absolutely. And the other thing that makes this work for us are our sponsors. Sponsors for today's episode include Go Designer go. We're@godesignergo.com SBS and you use coupon code SBS50 to save 50% off your first month. We'll talk about what exactly Go Designer Go is in a moment, but I just wanted to get that out there here while we, while we get started.

Shannon. Yeah, perfect. That's great. So, hey, today we're going to talk about vendor and supplier relationships. You made a comment in Slack talking about the importance of how you open those relationships up and get things started. And I thought that was a great topic that we could explore today.

Yeah, yeah, it came up. I was talking with a friend who's got a business going and I was actually reminded of you. But he was talking about how he runs an ad specialties business. Like, more specifically, I think, like T shirts and uniforms and that sort of thing. But, you know, he's, he's making these things and, and he was saying sometimes, you know, he's got to like, you know, FedEx something overnight or, you know, whatever to get it for a client. And I, I asked him, I said, do you have a FedEx like rep, not just a FedEx account, but do you have a FedEx rep? And he said, no. And I said, well, you know, at some point your business will be big enough where they will reach out to you. But my experience has been you can reach out to them and really start to get to know them early on in that process. And they like that. So, you know.

Yeah.

And of course, you know, you, you've been through, you've been kind of to the complete other end of that where you've had huge relationships with these companies just based on the businesses you've had.

So, yeah, yeah, I think it's a, it's a great way to start and then, and then we can expand out in some other professional services and stuff and talk about this too. Sticking with like the UPS or FedEx type of vendor relationship. But it could be anything that you buy for your business, whether it's a service or a product. You know, if you're massive user of office supplies, I guess you could, you know, some sort of wrapper or in my case a good one was a box vendor. Shipping supplies were a huge, you know, red line on our P and L. And so it was really important to have a good relationship. But, you know, if you're shipping stuff, there is a huge difference between just signing up online for a shipping account, even with usps, versus calling and getting a rep to come out and talking about your business. You want to meet with them, share what you're doing, what your story. Just you want to get on their radar.

That's really it.

Because yeah, yeah, there's all kinds of ways that they can help you, even just beyond offering you their services and things. They can connect you with other, you know, businesses in your area that they think, hey, you, I know this guy that does this and you, you know, or I know a good box guy if you're, you know, or a box company, you know, that that could help you or something like that. It's really important to do that versus just signing up online. And of course they're going to give you a better deal than when, if you signed up online 100% of the time. There's no doubt.

I say this as someone that ships very, very little. I mean, we sell, you know, display and podcast advertising, right. There is nothing to ship for us. So it, it's entirely possible that we go a month without using our FedEx account or our UPS account or our DHL account. And yet I have accounts with all three. I have reps that I know at all three. And then sometimes a couple of months go by and I realize, oh, the rep that I knew has left. And I got to, you know, reforge that. But even, even then, like, they are so happy to talk with me that they don't see it as a waste of their time. And if I'm not a waste of their time, it doesn't matter what you do in your business, you're definitely not a waste of their time. So.

Yeah, yeah, yeah. Well, they're in the biz dev business. And again, it's the same thing. Just like they may refer someone to you, you can refer someone to them and say, oh, you know, I know this guy that ships a ton and he's not getting good service with Company X. Why don't you call them? You know, so they're always looking out for, for relationships and connections just like you are. So that's valuable. And what I found is they just like to meet, if they're normal, human, they like to meet interesting people that are in business and learn about your company and they want to take you to lunch and they want to do stuff with you, give you tickets to football games, send you on trips. I mean, lots of stuff that are not always just related to how much money you put in, you know, how big the checks are that you're writing to them. But of course, you're not writing checks because you're using your affinity credit card, which helps your charmed life to get those points. But that's another show.

That's right.

That you can look up on businessshow Co. And I don't want to talk about shipping the whole time, but I do want to make a couple of quick points. You made that comment about reps leaving. That business really lends itself to turnover because those reps, in order to grow within an organization like UPS FedEx, they have to move around where, where opportunities become available to them. So just when you get things dialed in and worked out and you have everything going great with this rep, they're going to leave. So you need to be ready to, you know, forge a new relationship. It could even be, you know, every year or certainly every, you know, one, two years, they're typically going to leave. And then the last thing on this shipping thing, they're going to give you better discounts. And you may be surprised at how much they will cut the rates, their rack rates that the average person pays if they walk into a FedEx store or UPS store to pay. But the thing to watch out for, that will really eat you up are the fees. These, the fees are tougher to track. They often added on after the fact. They're easy to miss if you don't go over the shipping bills, like if somebody in your accounting is paying the bills. And these are like residential delivery fees. Signature required fees, out of area delivery fee. Who knows what the area is? I mean, do you track the maps of UPS and FedEx? But they have a map, I guarantee it. And if the driver has to go beyond that, you're going to pay a fee for that. And those fees are. Yeah, they're tougher to negotiate, but it is worth the time because they can be significant. And if you're shipping a box for, you know, 12 bucks, it could have $4 in fees added onto it before it gets to the customer. You know, two or $3. Residential delivery fee is not unheard of unless you negotiate it down.

Yeah.

And all that kind of stuff. So you want to keep an eye on those fees and stuff. They can, they can really sneak up onto you. Take it from somebod. I mean, my FedEx and UPS bills were, you know, outrageous. And we got a lot of nice lifestyle benefits from it. Like I said, you know, FedEx flew us out, took us to the Orange bowl, put us up for a week at the Dorel Country Club. Is awesome. Great.

You clearly shipped a lot. Yeah.

Oh, well, we paid for the trip. I kept telling you, this is not a free. This is not a free trip. But it was wonderful, you know, and UPS has taken us to golf tournaments at pebble beach and dinners and concerts. And those are great benefits to. And they help you lead, lead your charmed life. Right. Because you probably wouldn't pay to go to those events. I don't know, maybe you would, but I wouldn't.

Yeah, but still, it's a nice thing.

I met some great, great people. Excellent, Very, very good quality people that I, that I know to this day. And, and I don't do a lot of shipping anymore. I mean, I ship every day, but not of nearly of a volume since, you know, selling a ticker store about a year ago. So anyway, so that's all I want to talk about, shipping. But the same concept, I think we've talked a little bit about it in the past is really important and maybe even more important than like just shipping and stuff. But when you need, when you're going to need. Oh, I am to be looking.

You got to start that again, man, because the technology gods frowned upon us for about 12 seconds there. So say that one more time.

Sure. So you don't want to be searching for help when you need it. If you, if you're having. In the middle of an emergency, trying to find that person that's going to help you, like a lawyer, an accountant, a banker, those, those three veteran insurance guy, person, you know, that's not the time to, to search for them.

Right, right.

Not at all.

Not at all. Yeah, you won't be.

No, you're not going to be in the right mind to really take your time, to really be selective and choose the best fit. For me, those professions I typically don't like to deal with. So finding a person that had the right personality fit for me was paramount. And if you're in a, if, you know, if you're, if you want to sue somebody or you're, you know, involved in some kind of legal stuff, you don't want to be looking for a lawyer at that time. No, you want to find a lawyer, that's that you can just go and say, look, I'm starting a company or my company is two or three years old and I don't have an attorney. Can I come talk to you? And, or can I. Can we go to lunch? And maybe somebody referred you to them or something, but you want to, you know, they need to be in place well before you actually need them.

Right.

In that way, you find the best fit for you, your business, and again, your personality, which was really important to me. And once you find a good one of those people, they can often refer you to the next person that you need. Your lawyer, I guarantee, knows accountants and can say, oh, you know what, you're kind of a casual guy or you're very corporate type of person. This is who I would recommend that you get in touch with. And you can use them as referrals for your bank and that kind of stuff.

Yeah, yeah, for sure.

Really, really important.

No, that's good advice.

It's. Yeah. So, you know, those guys need to be in place. And just like, you know, a FedEx or UPS, you want to go and start those relationships early. You don't want to go in there and like, brag about, oh, we're going to be so big and I'm going to ship, you know, thousand packages a week or whatever it is, but you can certainly lay out your roadmap and be sure that they're ready for you. If you have, you know, some large plans for scalability, that you're going to grow the business. And it's the same with your lawyer and your accountant. You know, a Family practice lawyer, probably, you know, or may not be the best fit if you're, like, very. Going to be very aggressive and we're going to grow, grow, grow, and maybe you cut some corners here and there. You know, we talked about that in a last episode.

Yeah.

You know, you need to get. Get the right fit. And so you want to be upfront and transparent about what your future is, you know, plans are. And I've had this conversation with, you know, a few years back, I was looking for an accountant, a new accountant. And after sitting them watching their eyes kind of get wider and a little wider, and I realized how they're not comfortable with this.

This is the wrong person for you. Yeah, yeah.

And they were very successful. But I could just see, you know, she came back and she's like, wow, you know, I'm really more focused on helping professionals like, you know, architects and this and that and your, you know, basket of small businesses. Sounds very complicated to me. And I'm. I'm not the best fit for you. And that's what you want to find up front. You don't want to put in all this time and find out later.

Yeah, no, it's important. I remember when I found my accountant years ago. This was actually almost 20 years ago now, maybe 15. And, you know, not everybody was online at that point in time, and. But I certainly was because that's where all my. I mean, I'd spent my life online, but I also, you know, that's where my businesses were. And so I decided I am going to find an accountant via the web. Because if this person. Right. I mean, then I, of course I talked with him on the phone and met with him and all of that stuff. But if I couldn't find this per. If this person didn't have a presence on the web, that this was going to be a huge hurdle for me to deal with. Like, for them to just understand what my business was about. If they didn't even have a web presence and weren't findable that way, I just wasn't interested. I figured, you know, it's a good way to test.

It's.

Yeah, it's a litmus test. It just weeds out a bunch of test.

Yeah.

Yep. But, yeah, let's find that litmus test. Yeah. Because then. Because. Because you're right. You need to have somebody that. That understands what you're doing. And. And then, like. Like you were saying, somebody that's on board with similar levels of risk. I've always said, you know, I want my attorney and accountant To. To. To be one level of risk below me. Right. I don't want them ten steps below. Yeah. But I also want them to sit.

Or 10 steps ahead.

Or steps ahead. Yeah, right, exactly. But it's like I. I do rely on them so that I can sort of be a little more freewheeling and have them say, okay, you know, and. And if they're saying, okay, wait, pull the reins every single time. And you're not. I mean, I don't do things that are, like, patently illegal or anything like that. No, no, but, but, but there's like. Like we talked in the last episode, there's corners that it's being able to find somebody that's sort of in line with that. But I like somebody that, you know, I give the reins to, and I have to. I make it clear because, you know, I'm a pretty persuasive person. I'm pretty energetic when I get going on something. And so, you know, and people tend to want to, you know, especially service providers like an attorney or an accountant, you know, they want to please me. Right. They want to do what it is I want to do. And I have to tell them, okay, like, that's cool, but I actually rely on you to, when you think it's right, you know, tug on the reins a little bit and say, let's think about what you're doing here. That might not be the best thing. And because I understand enough about accounting and enough about law to be very, very dangerous. And. And that can lull an accountant or a lawyer into sort of a. I don't want to say a false sense of security, but. But sort of, you know, into non action. They can say, oh, well, this guy understands what he's doing. I don't need to consult him here. When, in fact, that's actually when I need the consulting the most, is when I'm making it up. Facts, you know.

Yeah, yeah, yeah, that's great. That's a really good point. And, you know, I think also sharing that expectation is really important, that this is what I'm expecting you to do for me with whoever you're dealing with, to your point about risk and accountant, you know, attorney, that kind of stuff. Even if, like, service providers, you know, throughout my whole business career, I've always struggled to get marketing and like, graphics people on board to help me, because I can't draw. I can draw a stick figure. I can kind of lay out. I can point at pictures and say, I like that. I want you to change this. Yep. But getting those Those folks on your team or someone on your team, especially if you're not hiring them in your organization, is really important. And knowing, hey, I want to see these iterations quickly and I want to change this stuff and. Because that's your message, right. To your customers. Absolutely. Your brand, right?

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Cool. So, yeah, one of the things I want to talk about, too, is it's really important, and it's our responsibility as business owners. And I didn't realize this as much. It took me a long time to get this figured out. But one of the keys to that successful vendor relationship is regular communication with. With your. Your vendor. Because, you know, if they don't know what's going on, you know, they have a ton of customer, ton of clients, whatever, and you're, you know, grinding away at your business, and, you know, they don't know what's going on. So if you're coming to them after the fact that it makes it difficult for them to kind of solve problems or offer you advice, and it's not like you want to ask them, you know, every step of the way, should I do this? Whatever. But they need to be kind of regularly reminded about what's going on with your company or what you're planning on doing. And if that's where I think that personality fit worked so well for me along the way, because I would want to hang out with these people. You know, I would say, hey, can we. Can we go to lunch? And half the time, we're not talking about the business. You know, it's like, hey, what's going on? What are you doing? What's your kids? This kind of thing. But then you get around talking about your business, and just those regular conversations lead into, you know, oh, well, maybe before you do that, maybe we need to file this paperwork or maybe we need to do this trademark thing or maybe, you know, this. This kind of conversations. And if you don't have time to meet or you're not the kind of person that wants to go meet with them or they can't meet with you. You could even do it like kind of a State of the union type of letter or email, but more the state of your business. And we've talked about on the show here, the executive summary, where you're talking about what went on this year, what changes in my business were there, which is a great, great tool. I think we have an article up on the BusinessShow Co about it. And, you know, that really helps you talk about what happened this year. And it helps you prepare, like, your corporate minutes. And you can give it to a banker or your attorney or anyone that you're working with, like, hey, here's. Here's what we did. But maybe with these, you know, guys that you're working with, you want to do that a little more often. Maybe quarterly, every six months. Here's what's going on. Here's what we're planning. Because then they can really give you that kind of service. Because I had an accountant fire me. Yeah. And I had an accountant fire me one time for lack of communication. And I was shocked. I was totally shocked. And, you know, he just said, hey, we haven't been communicating very well. I was frustrated with some of the things that were going on. And he kind of tied it back to the fact that I wasn't communicating with him about my business. And I realized he was right. And my frustration level was, it was not warranted because I hadn't brought them along during this period of massive growth and change in one of my companies. And then I kind of dumped it on them, and they were a little shocked. And I wasn't happy with the way things went down. And he taught me a very good lesson about that communication and having that ongoing relationship back and forth. It could be quick emails, it could be whatever. And it comes full circle back to your litmus test, Dave, is how good are they communicating and using technology? I mean, ideally, it would be awesome to have your professional guys in Slack where you could drop comments in there and they could get to it and respond. I would be shocked if you were able to do that. But certainly you want them to be able to answer emails in a timely manner or have one of their staff answer those emails.

That's an interesting. I know we're going to talk about tools for your business in the next episode, but. But that's a really interesting tangent that you just mentioned. Like, if you're. If you're an accountant or an attorney or a consultant in any way that works with multiple businesses. You know, Slack is a tool that basically is the interoffice water cooler. Right? It replaces email and allows you to kind of, you know, stay in touch. Really interesting to offer. If you're in one of those roles, offer to join your client's Slack groups so that they feel like they have regular access to you. It solves this communication problem that I think is not for many entrepreneurs is not just limited to vendors. It's employees, anybody else. Right. For anybody that's used to doing everything on your own and you occasionally need some help, you're just not used to talking and telling someone what's going on with your business at every point in the day. And that's not obviously what your accountant wanted, but they probably wanted something more frequently than say, once a year. But that's really interesting, thinking about joining. If you got whatever, 30 clients, join all 30 of their Slack groups and then boom, there you go. Or.

Or manage, invite them to yours. And, you know, there's a big. Yeah, I think there's some pretty large communities that use Slack to communicate now. And you could, you know, create your own and say, hey, I'm gonna. We're gonna drop you into Slack. Create a channel, and that way you'll be on there. It's. It's just so much more efficient than.

Yeah, that's true. You could, you could do it the other way. Yeah, it depends on how you're servicing, how many points of contact you have at any one client or anything, but. Yeah, correct. Yeah, yeah, yeah, yeah, yeah. It's really interesting. Yeah. So anyway, I didn't mean to grab that tangent, but that.

No, it's good.

It's a really interesting twist. Yeah. Huh. It is.

And if you. And if you're not familiar with Slack, if you're just listening, joining us, you know, and starting to listen to the small business show, you know, you definitely want to catch the next episode, you know, next week that we're going to be talking about some of these tools and Slack will certainly be among those.

Slack's on my list for that episode already, so. Yep, yep.

It's on mine too. Yeah. Yeah, of course. So that's really all I have, you know, for today, about those relationships and, you know, opening up that. And it's just, you know, you just can't put too fine a point on it, how important it is if you have the possibility to have that human connection with those folks, you need to do it.

Yeah. On that. It's too easy these days to avoid human contact. And I see it even with our clients, like they. And I mean like voice to voice contact, either on the phone, in person, you know, hangouts, whatever. Everybody likes to eat email. Because there's something safe about email. Right. It's asynchronous. So you have time to think about your response or whether or not you want to respond. Right. You're not in the moment. So it's a very safe thing and that can be okay, sure. But there's something that gets missed there when you're not just interacting directly with another human in real time where, you know, a response is expected, you know, like a conversation. And even Slack helps helps to solve that because, you know, you're typing back and forth with someone. So, okay, there's a little more direct interaction, but. But yeah, just voice conversation in general. It's true. And you know, if you, if you turn it around and now you're the vendor and you do this with your customers, they. You got to find the balance because at some point your customers that aren't going to want to talk to you, you know, every day or whatever that is. But no, no, but finding that balance, where you're injecting some amount of that into the equation and into the relationship will make them, you know, it, it can make things more positive and, and better than the relationships they have with other people that they only know as that name in my inbox.

So, yeah, they will think of you differently, I guarantee it. Or, and, and you will think of them. I mean, it's just, it changes things. You know, I always.

It goes both ways.

Yeah, Yeah. I tell my kids, you know, high school and college, I'm like, look, make sure you go up is when class, beginning of the year and, and meet the teacher, introduce yourself. Hey, you know, in some way, make sure you make that personal contact and, and occasionally keep it up. And even if you don't need help.

And things go good, go to office hours anyway. Right. Is the.

You got it. Because if they don't know you. Yeah. If they don't know you, they can never give you the benefit of the doubt.

Right.

And I would say it's the same with the vendor, client, vendor relationship. If you don't know your customer and something goes wrong, you'll be like, ah, this, you know, whatever. I don't know this person, you know, they're trying to take advantage of us or whatever. And on the flip side, if you don't know your vendor or supplier, whatever, it's going to be tougher for you. So you want to have that connection.

Yep. For sure. For sure. Yeah, yeah, yeah. I always used to say the reason I go to trade shows is so that we can all remind each other that we're human. And, you know, that's really. Yeah, that's what it is. Yep.

Yeah.

Good stuff. Good stuff.

Yeah, it's great. Very good. Good to connect with everyone today and talk about this stuff. And like, you know, we said in the beginning, we'd like you to connect with us feedbackusinessshow Co or go to businessshow Co Facebook and come over into the small business support group and talk to us there. Talk, talk to other business owners. About four or five hundred of them over there.

Yeah, that's right. Yeah. Come and visit. It's fun. All right, folks, we will see you next week. Thanks to GoDesignerGo.com SBS keep living that charmed life, everybody.