Three Key Rules For Your Business Relationships

October 23, 2018 5:25 pm

Every business has its foundation on the relationships it has with third-parties. Utility providers, suppliers, wholesalers, service providers, outsourcing companies, and freelancers might all have a part to play in the day-to-day of your business. However, many small business owners have a “set it and forget it” approach to these relationships. Here, we’re going to look at why taking another look at those relationships you’ve built can be to the benefit of your business, and some rules to follow when working with others.

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There is always room for negotiation

Most contracts with your third-party providers and suppliers are going to have a term limit on them. Many of them might include a rollover clause so that once the original term ends, the relationship continues as normal. However, if you allow long-term relationships to go unexamined, you could be missing out on the ability to negotiate. As businessadvice.co.uk shows, there are a lot of ways to negotiate with suppliers and service providers. For them, a reliable long-term relationship and revenue stream might be important enough to justify offering you a discount or slightly lowering their prices. The longer your relationship with a provider, the stronger your negotiating position should be.

Don’t stay in a relationship that’s costing you

Sometimes, however, your negotiating position won’t change much at all. This is true of, for instance, dealing with business insurance or utility providers. They have the customer base that they don’t have to offer any wiggle room, even for their most loyal customers. As soon as these providers are offering worse deals than you can find from other companies, you should be thinking about making the switch. When your contract is coming to its close, use sites like businessenergy.com to see if you find electricity providers who might offer a better deal. There’s no reason to stay in a relationship that’s costing you more money if other providers can offer the exact same service. Unless your loyalty is being rewarded, it’s pointless.

They should evolve with the times

Your business’s needs aren’t always going to stay the same. As you grow, your demands might not only grow, they might change as well. For instance, a smaller ecommerce business might do just fine working with a delivery company. As you ship more products, your delivery volume isn’t the only thing that will increase, your packaging and storage needs might as well, meaning that you could need a larger fulfilment provider. Visiting expos, trade shows, and other business networking events will help you get a better idea of what suppliers and service providers are out there. If you see the opportunity to switch to a provider that offers the same service you’re getting from one of your partners, but with extra services that you’re going to need as you continue to grow, it’s better to make the switch so you’re relying on one partnership rather than two.

It’s always a good idea to consider when it might be time to end a relationship, as well. As the business grows, for instance, it might become more cost-effective to take certain duties in-house or to hire certain roles rather than to keep outsourcing them. Your view on your relationships must evolve to match the evolution of the business over time.

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