From outsourcing payroll to hiring help for odd jobs in your storefront, working with vendor services can help you streamline your operations, save time and expand your offerings. But these partnerships shouldn't be undertaken lightly — finding the wrong match can leave you worse off than going it alone. It's important to take the time to find the perfect fit for your needs and your budget.
Here's a five-step action plan to find the right vendor for your company.
1. Define Your Needs
Before you start shopping for vendor services, define your company's specific needs. Do you need an agency to build and host a website, for example, or can you work with a freelance web designer for a simple setup? Outline the tasks you want completed, as well as the value-added services and benefits you hope to achieve. Create a general budget for what you can spend, and determine your timeline for delivery.
It's also helpful to be clear about who you'd like to work with, in terms of location, customer support offerings, how long they've been in business, etc. Finally, compile these criteria into a scope of work that potential vendors can respond to.
2. Create a Target List of Providers
Once you've defined your needs, create a list of potential providers. Searching services such as the Better Business Bureau, chambers of commerce and industry directories can help you put together a target list. Ask other business owners for referrals, and ask professional organizations if they have recommendations or maintain vendor lists. If appropriate, consider issuing a job posting or RFP on an industry- or job-specific website.
3. Request Quotes and Presentations
For each vendor that looks like a potential fit, request a customized proposal. The proposal should outline the vendor's offerings, fees and other pertinent information. Request any specific information that's important for your decision-making process.
Ask for an in-person or virtual pitch where a sales rep can demo software products, offer preliminary ideas on your request, or explain how businesses use their services. By understanding both their offerings and cost, you'll be in the best position to compare vendors.
4. Conduct Deeper Due Diligence
Ask vendors for references, and explore what other customers have to say. See if there are online reviews, Better Business Bureau ratings and other feedback available. Certain types of vendors may require additional vetting for security. An outsourced payroll company, for example, will have access to employees' personal information and your company's banking information. Create a list of background questions and areas to vet, and spend time gathering additional information on your top choices.
5. Sign a Contract
Once you've settled on a vendor, protect yourself by signing a contract or scope of work that outlines what you're buying, timelines for delivery and cost. Contracts should also include penalties for missed deadlines, termination guidelines, agreements regarding communication or customer support, and how you'll resolve a dispute if one arises.
A contract ensures that everyone has the same expectations moving forward and provides a reference document in the event of a failure to deliver. It also provides the basis you'll need later to determine whether your investment was a success.
Vendor services can help you strategically grow your business while freeing your own time to focus on other projects. Invest the time to define your needs, vet potential providers carefully, and you'll ultimately position yourself for a solid partnership.