We have heard many “war stories” from startups navigating “stormy waters” while managing their legions of freelancers, corp-2-corps, and other suppliers. The younger and leaner your startup, the more crucial these relationships are to the survival of your business. Doing things right from the very beginning will save you some sleepless nights and money.
Here are some things I learned from my own experiences and “war stories” from other experts in operations about managing freelancers, contractors, and suppliers in the startup world:
- Always look for a win-win for both sides and refrain from using positional bargaining. What goes around comes around and you don’t want to find that out the hard way.
- Never tell a supplier that they are “strategic” to you to garner discounts. That BS only works once and you will pay for it.
- If you can, place an order 2-3 weeks before the end of the quarter! Sales people appreciate this and will not forget it (especially if your order bumped him/her to a higher commission bracket).
- Be very clear about which services and products are of strategic importance to your operations and which are just commodities. Treat your strategic suppliers like your kids – be very clear about your expectations, trust but check, require high service but reward for above and beyond, and grow together.
- Even if you are bootstrapping, don’t ever make promises to your vendors that you can’t keep. It is not fair to them, it is bad Karma for you, and you don’t want to develop a bad reputation. If you are committed to paying Net60, than do so. If 45 days into it you find out you can’t do it, communicate and resolve the issue.
- If you get gifts from suppliers, accumulate them (non-perishable) and give them away to staff (if perishable, than immediately place them by the coffee machine). Though temptation might be high to keep all the schwag for yourself, remember who paid for things. You never want to be accused of being swayed by gifts (even if it was not the case).
- Follow forums and other places that current and former employees of your strategic suppliers frequent. If you notice a company treats their people poorly, then they will most likely treat you poorly as well. Find someone else. Do not tolerate bad business practices, because that is your responsibility as a corporate citizen.
- Always remember that your suppliers may become your customers too. Treat them well.
- Don’t ask your vendors to do anything for you that you would not do for your client.
If you have any great lessons you have learned while managing your freelancers, vendors, and suppliers, please share them in the comments section.
Apolinaras is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.