First Things First

Before you begin searching for vendors, it’s important to analyze your business requirements. What products or services do you need? How important are they to your business? How often do you need them? How will these products and services affect your bottom line? How much are you willing to pay? What are your expectations of a vendor?

Thinking through these issues and putting the answers in writing makes it much easier to narrow your list of candidates and eliminate those that don’t meet your minimum requirements. Be sure to get input from those who will be directly affected by the vendor relationship.

Once you have determined your requirements, it’s time to put together a document that you can give to potential vendors stating your requirements and soliciting a response. Depending on your needs, this may take the form of a Request for Quotation, Request for Proposal, or Request for Information. In each case, this document should contain a detailed description of your requirements and expectations as well as any assumptions, constraints, or special conditions the vendor should know about. If you are looking for materials, be sure to request samples.

When you have received enough vendor proposals, you can begin the selection process. Always keep in mind that you are looking for a vendor that can provide what you need when you need it at a price that fits your budget. Due diligence in the selection process can make or save you a lot of money in the long run.

Pricing Isn’t Everything

It’s easy—and often foolhardy—to choose a vendor simply because they offer the lowest prices. It can also be tempting to switch vendors whenever you discover a less expensive deal. That deal can go sour very quickly if the supplier doesn’t deliver on time, fails to provide consistent quality, or refuses to work with you in times of special need. Value for your money should be a greater concern than just getting a bargain price.

Following are some other qualities you may wish to consider when searching for the best vendors for your enterprise:

Reputation

These days it’s easy to check a company’s reputation online. Look for ratings and comments from past and present clients and note especially any that talk about the financial effects of the vendor relationship. Be aware, however, that there may be false reviews, either positive or negative, on the Internet. If appropriate, you may wish to contact companies that have dealt with the vendor and get their opinions directly.

Stability

If you are looking for a long-term relationship, you will want to find a vendor that is likely to stay in business and provide consistent service for the foreseeable future. Longevity may be a key consideration, as well as the stability of the industry. Another consideration may be the number of clients the vendor services. A company that has only a few clients can quickly get into financial trouble if any one of those clients should disappear.

Reliability

The last thing you want is to fail your customers because a vendor failed you. You want to find a vendor who delivers accurately, on time, all the time, without excuses, and who acts quickly to resolve any problems. Spending time and money to fix mistakes caused by a vendor can be extremely costly both in lost revenue and loss of customer confidence.

Flexibility

When unexpected problems or opportunities arise, as well as in times of seasonal changes in demand, you want to be able to work with your vendors to make adjustments. An ideal vendor is willing to help you fill rush orders and change or cancel orders after they have been placed. There may be times when you need to delay payments or adjust terms. A vendor who understands and is willing to work with you can be a priceless asset.

Responsiveness

The right vendor will be easy to contact and will promptly answer your calls and correspondence. You should look for vendors who care about your business relationship and are committed to helping you succeed. Ideally, your vendor will be knowledgeable enough to give quick answers and creative enough to help you find quick solutions.

Integrity

Too many vendors make promises they can’t keep, in order to land a contract. Others may misrepresent their capabilities or fail to disclose potential problems. Look for vendors who are honest about what they can and cannot, will and will not, do. Watch for red flags that may indicate overpromising or dishonesty. A vendor with integrity will ask questions and point out concerns before entering into a contract.

Remember that integrity is a two-way street. It’s important that you be honest with potential vendors, and fully disclose any circumstances that could affect your business relationship. The value of a long-term partnership based on mutual trust and accountability cannot be understated.

Sealing the Deal

Once you have found a vendor you want to work with, it’s time to negotiate a contract. You want to work out the best deal possible for both you and the vendor. Some things to take into consideration are:

• Pricing and expectations regarding increases or reductions
• Payment terms and flexibility
• Communications
• Inventory balance (having sufficient to sell without tying up too much capital tied up)
• Exit strategy in case things don’t work out

Additional Tips for Choosing the Right Vendor

It’s important to remember that vendors are critical to your business. It’s a good idea to have at least 2 “go-to’s” for critical items. That way, if one is struggling you have options (as the saying goes, “Don’t put all your eggs in one basket”). It also helps in negotiating prices when suppliers know you have options to help keep them honest. We’ve found that, for the most part, vendors seem to understand it is part of smart to have a few sources of supply and don’t take it personally if they don’t get all your business.

For critical suppliers, it is important to meet with them at least a couple of times per year in a semi-formal “business review” setting. This helps keep surprises to a minimum for both parties and helps the relationship.

Final Thoughts

Having the right vendors can make or break your business financially. A long-term relationship with a vendor who provides well-priced products and services in a consistent and timely manner and is willing to work with you in times of special need is of inestimable value.

The post Choosing the Right Vendors for Your Business appeared first on VVREDDY & ASSOCIATES.

But budgets can feel tricky – if you’re still in the early stages, you may think it’s impossible to make an accurate budget. Or if you’ve been operating for years, tracking every nickel and dime can make your head spin! But regardless of where you’re at in your business journey, having a business budget allows you to be proactive, instead of reactive, for your important expenses.

Looking to start building your business budget? Here are our simple tips to help!

Start with Expenses
Starting with fixed expenses lets you know your break-even point and the primary bills that need to be covered. These are the easiest to find because they tend to be the same month over month (rent, internet, hosting, staffing costs, etc.). Then, determine variable expense (COGS, variable staffing, utilities, etc). You can include a variety of scenarios for this budget depending on your income for each month.

It’s also important to note down seasonal, annual, or one-time investments. If you decorate the office for the holidays, make sure you account for that expense in your December budget! If you require additional staff in the summer, make sure your staffing budget allows for that. If you have a large upcoming expense, such as new equipment or furniture, you can also begin setting aside money each month to fund the purchase, instead of having payments afterward.

List Your Revenue Streams
Depending on your business, you may have multiple streams of income. From multiple clients to different streams of your business, or even investment income, it’s important to account for all of the different sources of revenue your business has. If you’ve been operating for years, you can use historical data to determine what your average monthly income will be for each month. If you’re just getting started, you may want to mark down a minimum revenue needed to keep your business operating smoothly.

Most businesses have high seasons and slow seasons, so accounting for the increased revenue at different times of year is important, as it can impact your expenses as well (more sales could mean more supplies, longer hours, and additional support).

Plan for the Future
Are you thinking of growing your space, investing in new equipment, or breaking into a new market? After subtracting your expenses from your revenue, you can now start to look for opportunities to invest in your business and set yourself up on a path for growth.

If you have accrued revenue in your business, consider how that could best be spent on the business, or if additional investment is a way to go. If you see that there’s some wiggle room in your monthly budget, perhaps a new team member to help take your business to the next level, or investment in streamlining and automating your systems to scale would be a great way to use those extra funds!

Prepare For Any Scenario
When building a budget, it’s worthwhile to plan for any scenario. Ideally, you’d want to have a ‘break even’ budget – knowing which expenses you could cut or revenue streams you could rely on if you needed to simply break even each month. Then, you can make a ‘stretch’ budget – if you reach all your big goals, what would that look like for revenue, expenses, and investment in your business?

How To Track Your Budget
The easiest way to track your budget is through cloud-based accounting software that automatically tracks your expenses and revenue and tracks how much you have in each of your accounts for a 360-degree view of your business finances. We recommend using Xero for its simplicity, user-friendly design, and powerful features!

Meeting with your accounting or virtual CFO on a monthly or quarterly basis also helps you to stay on track, and get an expert perspective on your business’s finances, helping you make the most of your current position and setting yourself up for success in the future.

Looking to take your business to the next level? Reach out to the Virtual CFO and let us guide you in making the best financial choices for your business.

The post A CFO’s Guide to Building Your Small Business or Start-Up Budget appeared first on VVREDDY & ASSOCIATES.

To avoid burnout, small business owners and founders need to be proactive in organizing their team and their workflow in sustainable ways that support both long-term success and the mental health of everyone in the organization. That might sound difficult but trust us: with a little planning (and a little help), it is absolutely doable!

Get Organized To Avoid Small Business Burnout
How could you not get stressed out if every day you came into a cluttered office, sat down at a cluttered desk, turned on a cluttered desktop, and opened a cluttered email inbox?

And how can your company stay nimble, when operations like managing your finances start piling up, with no one on your team adequately managing them?

One of the best ways to avoid burnout is to take some time setting up your office and operations for success. Find 10 tips for setting up a productive office here.

And small business owners are often dreamers, thinkers, and doers. In our experience, they’re often great at making sales, motivating people, and taking chances … but maybe not so great at the nitty-gritty work of payroll and accounting.

But having your finances in order takes a big, burnout-inducing weight off your shoulders. Using a virtual finance team to manage your finances and accounting can really help you build a strong foundation so you can scale your business (not to mention how much easier it can help you sleep at night!).

Get Support
We get it. Your business is your baby, and it’s tempting to want to do everything – and we mean everything – by yourself.

But you don’t have to do it all alone. Trust your team to do what you hired them to do. Consider speaking to a counselor if you think you’re getting overwhelmed, and look for other tools or systems that can help you with your day-to-day.

For example, Alexandra paired up with Pansy of The Visual Narrative Company to create the Startup Kickoff Kit. It’s an all-in-one resource that can help you get clarity on your finances, while also perfecting your pitch deck.

See? You really don’t need to be all things to all people. You just need to know how to find the right people to support your small business or startup.

Take Breaks
Let this sink in. The more you’re able to take breaks to refresh and reset, the better you’ll perform, and the more present you’ll be for your company. It’s not selfish to schedule in some much-needed downtime – in fact, it’s a necessity!

Self Care!
And it’s also not selfish to take care of your own mental, physical and emotional health and well-being. Eat right, get exercise, prioritize sleep, maybe take up yoga or meditation. Get time in nature. Take walks. Connect with loved ones. Everything you do to make your life better will have the added benefit of making your company better in the long run, too.

And have a little fun. It’s why the Jeopardy!® game made it to our list of the best apps for keeping remote teams connected, and why we’ve also recommended community conversations and Friday afternoon rituals to foster a healthy workplace culture.

Remember, you’re not just a small business owner. You’re also a team leader. It’s important to keep your employees happy and healthy, and it’s important to keep yourself happy and healthy, too. The more you can do this, the more everyone can thrive.

The post How To Avoid Burnout As a Business Owner or Founder appeared first on VVREDDY & ASSOCIATES.