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Running a Small Business

Lesson 4: Subcontractors and employees

Good suppliers and subcontractors

Whether you run a virtual business or own a business with an office, a plant and lots of employees, your business can't do everything itself efficiently. It needs suppliers and sub-contractors to do its work when your business can't do it or others can do it better and less expensively. These suppliers and sub-contractors are in fact partners in your business venture and, to be successful, you need to identify those that are important for your business and cultivate long-term, mutually beneficial relationships with them.

Good suppliers and subcontractors depend on your success to be successful themselves and they realize that. The key thing is that you must both benefit from the relationship and then what you put in your contracts becomes less important than the relationship itself. Instead of trying to get an advantage, you'll be looking out for each other. If you can get suppliers and subcontractors like that, your business becomes much easier.

There are many things which identify a good supplier or subcontractor.

He has a customer-oriented system for taking messages when he's not available.
He calls back promptly.
His pricing is fair and consistent.
He performs as promised.
He delivers when he said he would.
His supply does what it is supposed to do.
He fixes problems as quickly as possible.
He changes his operation so that problems don't repeat.
He honours his warranties without questions.
His advice to you is consistent and takes your interests into account.

When you find a supplier or subcontractor like this, you have to do your part to be a good customer.

You pay on time.
You give him business when you can.
You order at the price he quotes
You refer him to other potential customers.
You try to understand his business and accommodate his needs.

That's why I like to call my suppliers and subcontractors, at least those who are good ones, partners. If you can rely on them to keep your interests in mind when they do business and you do the same for them, then you can both benefit and share in your successes.