A supplier that fails you could ruin all the hard work you put in to build your business up.
For example, you have a reputation for producing the best Italian-style pizza in town. If you cannot get the quality of flour, cheese, olive oil and other essential ingredients you need, your pizzas will suffer.
Even if you cannot get them for a few days, you risk losing clients who eat your pizza on a day when you had no choice but to use lesser alternatives. You need the quality of the things you sell to be consistent, which becomes harder when your supplier is inconsistent.
Here are some steps you can take before signing a contract with a supplier:
Research their reputation
A guy with an impressive sales pitch appears from nowhere, offering to supply you with fantastic buffalo mozzarella at a great price. He gives you a sample, and it tastes great.
Before you rely on him or sign a contract, check with others in the restaurant business to see if he is as good as he seems. You may find others agree that his mozzarella is the best but found him impossible to work with because they could never be sure he would deliver on time.
Set down clear payment terms
Are you happy to pay on delivery each time, or do you need a line of credit? There are many options, but be sure to spell the terms out in the contract to avoid money disputes later.
How do you end things?
What happens if Mr. Mozzarella gets an offer from a pizza chain to buy his whole year’s supply? Can he drop you as his client, or does he need to provide a certain amount of notice? No business relationship will last forever, so it is crucial to specify how either of you can end the relationship.
If this advice comes too late and your business is already suffering due to a supplier letting you down, get legal help to understand if you can hold them to account for a breach of contract.
