Let’s start with this: all businesses, including the Apples and Googles of this world, need to make smart buying decisions; whether they need training services, office furniture, a POS system for pharmacies, and the list goes on.
However, it’s also true that startups need to be even more vigilant and about choosing the right vendors, because mistakes aren’t just costly: they can be devastating. After all, a little over half of all startups fail to reach their fifth birthday. And while errors in vendor selection obviously aren’t the sole reason for these premature commercial fatalities, they do play a significant role in many of them.
Considering this, here are three unusual but essential questions that startups should — actually, make that must — ask prospective vendors before they make a purchase, and not after when it can be too late to mitigate the damage or avoid disaster:
- What kind of support do you offer?
The importance of this questions can’t be underestimated, which is why it’s number one on the list. Virtually all vendors (let’s assume) will offer a product that, at the very least, meets basic requirements. In other words, the employees will be able to make and receive calls (sooner or later) on the new VoIP phone system, and the workstations will allow folks to, well, get work done.
However, in most B2B relationships, the proverbial rubber doesn’t hit the road until after delivery or implementation: because that’s when issues, problems, concerns and opportunities arise. It’s essential for startups know what is included in the scope of the agreement (e.g. on-site service, technical support, etc.) and what isn’t, so they don’t end up paying far, far more than they planned to get the outcome they expected.
- What will they do to learn about your business?
Vendors that are primarily — or exclusively — interested in your money vs. your loyalty will typically tip their hand when asked this question, because they’ll do everything they can to avoid answering it. For example, they’ll hit the adjective turbo button and tell you at a very high level about how much they care for clients (blah blah blah), but they won’t actually tell you HOW or WHAT they’re going to do — such as conduct interviews, perform an on-site inspection, launch a pilot project, and so on.
Obviously, different vendors who are ready, willing and able to learn about your business will do so in various ways. The key point, though, is to make sure that they’re going to deliver vs. just talk.
- Will they go to bat for you?
Vendors talk a lot about being partners, but those that keep this promise will be willing to go to bat for you if, for example, you have issues with a customer or another third-party and need some support.
For example, if you purchase a next-generation network security firewall and a few months later a customer claims that they suffered a breach after visiting your website, will your vendor step forward and help you explore the issue and defend your reputation? If the answer is yes, then they’re a legitimate and value-added partner. If not, then they’re a vendor that is over-promising and under-delivering.
The Bottom Line
Startups face enough pressure and risk due to everything from shifting customer trends, to changing economic factors, and of course, there’s Uncle Sam and his relatives at the state and local levels that love wrapping startups in taxes, fees and regulatory red tape.
In light of this, it’s critical that vendors are part of the solution — not the problem. Asking the above questions will help your startup choose vendors that are worthy of your loyalty, and avoid vendors that are only interested in your money.