Becoming An Entrepreneur: Why You Should Be Smarter Than Your Vendors
It’s OK to admit that you don’t know everything about what needs to be done to complete a full-scale marketing campaign — many businesses don’t. I say this to not provide comfort to those who find that statement true, but to warn those who do of the danger of thinking that’s actually acceptable.
You need to know why it’s important to be smarter than your vendors. I’m going to reference a few points as to why this is essential in the growth of a new business and how it can instantly bankrupt you if you don’t know what you’re doing.
What To Look For In A Great Vendor
So, what exactly is a vendor?
A vendor, of any kind, is typically a third party business or an individual who provides a service to your business.
This can come in the form of marketing service providers, installers, website hosting providers, developers, etc… Essentially anyone who does the work for you so you don’t have to.
Awesome, right? I mean, we can’t do it all, so it’s OK to pay for some help.
That’s completely true.
There is absolutely no shame in admitting that your business needs some love and attention. Investing in extra help, whether newly on-boarded staff or hired vendors can be extremely wise.
While all that sounds wonderful and we’re ready to go find our first set of helping hands, I’m going to ask you to stop right there.
Think about this for a second because there are a few questions you need to ask yourself and your potential set of helping hands prior to agreeing to invite them into your business.
Here are some essential things consider before looking for a vendor:
- Can they prove their value? What an excellent question. I can’t tell you how many times I’ve been in conversations on behalf of business owners who have me on the phone with their best friend’s kid who happens to run a business out of their car. It honestly doesn’t matter where or how they work, but the better question is why are they worth hiring? It’s essential to see hard-core data that proves that they will accomplish what they claim to be able to fulfill for your business. Don’t take them at their word or trust them based on who they’re related to or they’re story-telling abilities — always ask them for the proof that’s in their pudding and take a bite to see if the flavor will give you the satisfaction you require to be successful.
- Can you do it better? It’s a pretty simple concept. If you’re not impressed, don’t sign the contract. Remember though, you get what you pay for. If you go cheap, they’ll give you just that. Pay for quality and don’t skimp on investing in your business. Your business is your livelihood so you need to take it seriously and treat it well.
- Are they working with your competitors? Ouch. This is a big one. It’s imperative to make sure that your company’s “secret sauce” is not exposed to companies or individuals who are connected to your competitor. Not only is it a conflict of interest for them to be working with you, but there’s a huge likelihood that your businesses’ goals and trade secrets will be compromised. Not sure if they’re working with your competitors? That’s an easy fix. Just ask them and make sure to include a clause specifying who they can and cannot work with while your contract is active and the consequences if you find out that they are.
Why You Should Be Smarter Than Your Vendors
OK, so in classic “me” style, I’m going to tell a story or two to explain this point.
The Individual Consultant
(Going back in time…) I’m working with an organization that decides to hire a consultant to instruct them how to build a marketing division and stop working with a vendor. This person, on paper, claims to know everything there is to building this division for this organization because, supposedly, they’ve done exactly that for comparable organizations. They have over ten years of experience and have supposedly consulted with several large companies and have seen wonderful success.
The executives say, “Great. Awesome. This is the person we need.” And my stomach immediately begins to turn.
First of all, my red flag began to raise because no one know’s everything about building a division. You can have a foundation, but each business is dynamic and going in with a one-size fits all idea will lead to failure. You have to take time to do an in depth analysis and then begin to build. But, what do I know? I’ve only done this already. No biggie.
When it came time for the rubber to hit the road, we came across several things that both delighted the executives and scared me half to death.
This person was making some progress. They seemed to know what they were doing and had everyone convinced of that by showing a few small examples of their concepts and we were starting to make some kind of traction with results.
Because they had shown micro-growth, they were immediately handed the reigns to make all kinds of decisions — including “coaching” staff members.
This is where things began to turn for the worst and I felt it coming.
Because the assumption was that they knew everything, what they didn’t know was what each individual did and how to convert their current responsibilities from their original intent to now integrating the needs of this new division.
The best part was that they also didn’t consider capacity and workload so none of these individuals could do what they were asking.
And, here we were at a dead stop.
This person had no idea what to do, but continued to create nonsense to save face. The worst part was that the executive team didn’t know the difference and didn’t listen to their staff so they continued to work with this person and drive the division to no where.
End result. The organization will soon be back with a full time, over priced multi-team mega vendor, due to now operating in the red, because they refused to scrutinize their consultant and trust their team to point out the error of her ways. The team knew better than the consultant, but because the team members weren’t one themselves, they weren’t trusted and didn’t matter. A very, very bad choice was made there and a huge lesson was learned.
The Mega Vendor
They’re a multi-million dollar mega house that promises Fortune 50 style results. They send you tchotchke, pamphlets and even buy you lunch to get you to sign that contract, and you do. Perfect.
They ask for logins and passwords and move in. You think, “Wow, this is great. I can finally focus because they can just do that stuff I know needs to be done but I don’t want to have to learn how to do myself.”
Six months pass and it’s time for your metrics review. You see great growth in the deluxe dashboard they’ve created for you. They’ve created new programs, upped your ad spend, and have gotten you “results”. However, there’s just one problem. When you look at your bank account — there’s no huge increase, only a huge decrease because their quarterly contract dues just hit your account.
But, they’re getting you “results”, right? I mean, they’ve increased traffic and really shown that people like your videos and blog posts because of how many people have seem them. So, you start asking yourself, “Why am I not making any money and when I ask them that question, they say it takes time and it’s all about perspective.”
Ah-ha. There’s the catch.
You never set goals for them or told them what you needed and expected. You trusted them to deliver “success” to you and they claim that they’ve done their job and want to get paid.
What you should have done is understood why you needed to hire them to do and watched them like a hawk.
Because you’re one of thousands of customers and your success doesn’t matter to them. They only do what their told and if they’re not told anything, they’ll do just enough to build a cause to claim success and then bolt.
What you need to do is force yourself to know more about why you’re hiring them, set expectations for yourself and then hold them accountable to real results that will compliment, not supplement, your current initiatives.
The bottom line. Know more than your vendors. Be smarter and hold them accountable for how your business operates. Trust your staff or a dedicated person to monitor them constantly. Only at that point you’ll see a great ROI and feel confident in your business’ continued success.