How can I work with my customers, suppliers and other commercial partners to make the best of the current economic climate? What are good ways to nurture these existing relationships into mutually beneficial partnerships?
John Wright, chairman of the Federation of Small Businesses
Your business is like an extended family and as with any member of the clan, having good, clear lines of communication is of paramount importance.
Our economic landscape has changed enormously over the past year and there is no doubt that your small business will have had to adapt with it. With the credit crunch affecting everyone, your suppliers, customers and partners are most likely to be changing their working and spending habits too.
Suppliers and customers warrant careful attention as their actions are crucial to your business. Keep up to date with any modifications your suppliers will be making to their systems – particularly their payment times. Meet them face to face to see how they are changing the way they work and how you can work around this to benefit your business and not cause you problems.
Your customers are your biggest critics and their opinion can be invaluable. Talk to them - see what habits they are changing, what is making them tick and what makes them feel good about buying your product or service.
Adjusting your business to your customers' needs is important at anytime, not least in a downturn.
Stay in regular contact with your suppliers and keep an eye out for opportunities that you can take up and those you can pass their way. In a good customer and supplier relationship, they'll do the same for you.
Setting out clear guidelines from the outset of your working relationship will stand you in good stead if things start to go wrong later, and will give you a foot in the door when opportunities to develop relationships with suppliers and partners crop up.
John Grange, Business Link adviser
All businesses require the loyalty of both customers and suppliers to succeed. In a challenging economic climate it is essential that businesses are attentive and proactive in their management of both groups.
Knowing and understanding customer needs is at the centre of every profitable business. Now is the time to be certain that you are providing what your customers need today and will need tomorrow; not what they needed yesterday; and not just what you would prefer to sell them. Being customer centric will drive your entire business. Do not assume - ask, listen, think and then act. Being responsive to your customers' changing needs ingrains you as a trusted solutions provider to their business.
Invest time in building good relationships with your key suppliers. Meet your suppliers face to face and ensure that they understand your true needs. Consider a service level agreement with clear targets, performance standards and payment terms. Help your suppliers to support you better by sharing information on your sales forecast and by paying suppliers on time.
Business Link advisers can offer your business a free healthcheck to help you identify opportunities for improvement. The Business Link website has information on managing suppliers and keeping your customers. It also includes an interactive tool (www.businesslink.gov.uk/valuable) to help you identify your most valuable customers.
Melanie Arnold, co-founder Arnold & Henderson Catering
You cannot underestimate how important it is to maintain good working relationships with your suppliers. Remember – they give you the product and without them you've nothing to sell. The easiest and most effective way to maintain a fruitful partnership is simply to pay your bills on time. All businesses can experience cash flow problems, but it is a false economy to delay payment to such a vital part of your business. After all, you're not going to make any cash from an empty stockroom.
But what do you do if a supplier suddenly changes their payment or delivery terms? We're in tough times, so this is not out of the realms of possibility. But if this is going to cause you serious bother, you are much better positioned to negotiate if you've been a model client. Talk to the supplier in question. Is there any room for manoeuvre? Can you find some middle ground that suits you both?
Chances are the supplier has put the new rules in place to curb those who are consistently late in payment. If you've nurtured a good working relationship then you should be able to come to an agreement that suits you both. If not then you have to decide whether you'll need to move elsewhere. No doubt your supplier would prefer a new payment agreement rather than no payment at all. Communicate and you'll both end up happy.
And that goes for your customers as well. There's only one way to guarantee them coming back through the door – do a fantastic job. But customers' needs change continually: the fantastic job you did last time might be too expensive for them now. Talking to them will allow you to find a level of service that is right for what they can afford. As with many things, communication is key to keeping a relationship healthy and happy.
Arnold & Henderson are caterers and restaurateurs, based at Rochelle School on Arnold Circus in Shoreditch. Set up by Melanie Arnold and Margot Henderson in 1995, Arnold & Henderson organise off-site catering and events, from the most intimate to the wildest of feasts.
Marc Barber is away.
