Supplier relationships: The key to small business growth?

By Henry Brown

As a small business, there is one often-overlooked factor that is absolutely critical to your business growth – your suppliers. No business is an island, and the smaller your operation, the more reliant you are on good supplier relationship management. You will rely on this ecosystem to help you fulfill contracts, deliver the required service level, and even to give you insights and market intelligence that can help to determine your direction. Suppliers can become more like trusted business partners over time – but it can certainly be a challenge to find the right ones and to get those channels up and running to start off with. So what moves do you need to make to establish a great supplier network?

Map out what you need

You’re going to need all kinds of different suppliers to do business. From generic office supplies such as reams of paper and ink for the printers to specialist companies if you need functions such as CNC machines, assembling components or packaging design. You may have spent time developing a prototype that you need manufacturing support to turn into a reality, or you may need help developing a great ecommerce website that delivers on transactions. No matter what the niche, it’s helpful to map out these areas and then to decide what best serves the needs of your business. This could be working with large, big-name manufacturing companies who can provide consultancy or market testing in addition to other services, or you may be aiming to work with a highly specialist supplier that occupies a niche and can help to differentiate your product or service.

Negotiate your margins 

Business-to-business pricing structures are complex, opaque and variable – the opposite of walking into a store and paying the price advertised on the shelf. There’s a whole range of different service charges that depend on variable such as mass buying, the individual negotiated terms, the length and quality of the supplier relationship and myriad other factors. So certainly don’t be held back by being afraid to ask.

Start by asking what is required to get a better deal and what options are available. Disclose non-sensitive long-term plans to show your intentions to form a lasting, profitable relationship. Ask them what you need to do to become a top client. The benefits of a frank conversation where you acknowledge what you can do to better the relationship range from grace periods on payment to lower bulk costs.

Take a proactive approach

Although suppliers are an indispensable part of keeping our businesses running, many of us neglect to give these relationships the importance and strategic thinking that they warrant. It’s far better to adopt a forward thinking approach, which ensures that any potential issues are uncovered and dealt with early on, before they can derail the run of operations. The keys to improving performance and increasing profit margins start with improving supplier relationships and processes, which is far easier when you adopt a proactive and inclusive approach from day one.


Henry Brown is an online marketing executive. When he isn’t talking shop, he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.

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