Entrepreneur's Journal: Time to renegotiate with your vendors and suppliers?

Posted Feb 15th 2009 7:00PM by Tom Taulli
Filed under: Small Business

While the federal government is trying hard to resuscitate the economy, it's still far from clear when things will improve. In the meantime, businesses really need to prepare for the worst. And this means keeping costs low.

To this end, it's probably a good idea to do an extensive inventory of your expense items. What do you need? What can you live without? No doubt, it can be an eye-opening exercise.

You might want to annualize the expense items. It can be surprising to see how seemingly small expenses can add up.

Once you have this put together, you can then reach out to your suppliers and vendors to see if you can get better rates. "It should be no surprise for them," said Devin Jopp, who is the Chief Operating Officer of SCORE (Counselors to America's Small Business). "Suppliers and vendors have spent a lot of time getting customers and it's expensive to let them go. So, they should be willing to renegotiate."

Now, this doesn't mean you should play hardball. After all, it's important to maintain a good relationship with suppliers and vendors. That is, price should not be the only consideration. Basically, you want to make sure there is quality, too.

OK, let's suppose you are not getting the deal you want. Well, in this case, it makes sense to seek out alternatives. The internet can be a big help.

For example, ResourceNation.com has an extensive referral service for small business providers, covering things like phone systems, payroll services, teleconferencing and so on. It's easy to use and is based on bids from qualified vendors and suppliers. All in all, it's definitely worth checking out -- and can help out your business in these tough times.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a free online business valuation tool for small businesses.

Tags: Cutting costs, CuttingCosts, Suppliers and vendors, SuppliersAndVendors

Print this

Reader Comments (Page 1 of 1)

2-16-2009 @ 7:30AM

panellockout@aol.com said...

I just cut $54/mo., $67/mo., and $1200/mo, from my cable TV, phone and rent. Its crunch time. You have to cut the fat.

2-16-2009 @ 8:49AM

Evelyn Birdwell said...

On the other hand, your vendors and suppliers are also a part of the US of America and also feeling the crunch. Plus your employees want a raise but won't go to drastic measures to force you into giving them one ... there are plenty of other workers out there who will be happy to collect the paycheck, and as long as you pay the same as most everyone else doing the same thing you are alright. Of course, it's grand if you produce something people really want/need and you do it as well as or better than anyone else.

2-16-2009 @ 10:48AM

Harvey said...

I own and operate a small buisiness. There is nothing like hands on operation of your business. You have nobody to blame but yourself if things go wrong and you have everything to gain by doing it right. Am going on 30 years of living the American dream and started from nothing, was given nothing and haven't had to steal anything. If you don't pay your employees a good wage, they feel justified in taking it in other ways. If you can't afford to pay them a good wage then do it yourself. Get your mind set so that you don't HATE any job that you are doing and you will succeed.

2-16-2009 @ 11:09AM

Denver Ayers said...

Us face it we have been living the good life. But it's time to get more parking in the drive way. instead of four auto's there cut that back to two. Remember the movies we see where all that rusty iron is beside the raods and people are killing each other for fuel. { Mel Gibson in Mad Max} plus there was more. Ask yourself, Do I remember those old movies of space ships going to the moon?[science fiction] was it. If God can put these idea's in the minds of great people and they are full filled, then what do you think our future and the future of our children and grand children's lives are in for? God isgiving us the chance to change the future, no I didn't say death, we were all borned on this Earth for on purpose, that is to die. But he gave us a choice as to how our lives would be until that day he comes for us? Now comes the President with the words "CHANGE" this is the same word that God has offered to us. It's time people, and it's up to us? Do you want to star in a picture or the future as we have seen it projected? Think about it! Denver The Trucker

2-17-2009 @ 8:41AM

Louise said...

WHY IS IT THE WORKING PERSON HAS TO CUT, BUT THE BIG BOYS THAT CONTROL THE ECONOMY CAN SPEND SPEND SPEND AND STEAL STEAL STEAL. FROM THE WHITE HOUSE TO BLUE COLLAR WORKERS THEY SET ON THERE ASS AND SPEND AND STEAL EVERY WAY THEY CAN. THE WORKING MAN AND WOMAN IS FED UP, AND IT IS GOING TO COME TO A HEAD SOON.