Michael Glover
Jul 14, 2022
Updated: Mar 6, 2023
Have you ever had a deal with a vendor go bad? We all have have had that experience where something is sold to us in a nice golden package only to open the box and find that what we were sold was a pile of rocks. What happens then? Does the vendor have some kind of process to help make things right when something was not delivered as promised? All of these questions can be a part of a Vendor Approval Process.
This process is a part of the Quality Management System that is used by so many organizations, especially in the aerospace and defense industry. However, adopting this practice into your everyday business will not only save you time and money, it will also weed out the scams that message you daily through email, phone calls and social media platforms.
When Paramount Leadership Group implemented this process, we quickly found those organizations that really wanted and appreciated our business. It showed who was willing to fill out forms, submit documentation and go through a due diligence process check. They were willing to prove how good they were and that they had a good support process to help their clients have a positive experience.
So what goes into the Vendor Approval Process? It can be different for each organization and different requirements can be sent for different types of vendors. Obviously, we are not going to have every single vendor fill out forms and submit documentation such as W-9s and payment instructions. Places like office supply stores do not need such documentation. Most of the time, they already have proven they have a good support system. However, a social media marketer messaging you on LinkedIn or Instagram will need to go through a bit more of a process.
The first step is to determine what is important to your organization and the values you want to have. Once you have these values set in place, you can determine what values you want in your vendors. Here are some helpful ideas and question you might want to ask and why.
What is all of the contact information for this vendor?
What is their annual revenue? We ask this to determine how stable of an organization they are. There is no set requirement for what their revenue needs to be, but we want to get an understanding of what stage of business they are in.
Do they have a website? What is on it? Do they clearly state their values, objectives, support process?
Do they have any applicable certifications to the industry they are in? What do they have to backup their statements? (reviews, certifications, a portfolio, etc?)
What is all the services that they offer?
What are their payment terms?
Do they have a social media or other online presence besides their website?
When a potential vendor is willing to share this kind of information with your organization, they show how much they want your business and that they are who they say they are.
We go over more of these types of business practices and how to implement them in our Business Owners Show. We do live streams and have a private group (not on facebook or any other social media platform), where business owners and entrepreneurs ask questions, share ideas and support their community. If you would like to watch Business Owners Live, you can RSVP to the free event below or catch the latest every week.