6 tips for main­tain­ing ven­dor re­la­tion­ships

Chal­leng­ing and com­pet­i­tive mar­kets make it all the more cru­cial for restau­rant own­ers to main­tain a sus­tain­able and solid re­la­tion­ship with ven­dors. Omar Ma­harsi, di­rec­tor of op­er­a­tions at Glee Hos­pi­tal­ity So­lu­tions, a com­pany spe­cial­ized in the Mid­dle E

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1. Cre­ate a mu­tu­ally ben­e­fi­cial re­la­tion­ship with ven­dors

Where pos­si­ble, restau­rant own­ers should try to ob­tain items from a select num­ber of sup­pli­ers and sign long-term con­tracts that in­clude a credit limit and fixed prices to en­sure a sus­tained and trans­par­ent deal. Cross-pro­mo­tions could also be an op­tion for restau­rant busi­ness own­ers to con­sider of­fer­ing. If, for ex­am­ple, a ven­dor of­fers ser­vices which may be ben­e­fi­cial to a restau­rant owner’s cus­tomer base, pro­pri­etors could pro­mote those ser­vices in re­turn for dis­counts or re­fer­ral fees.

2. Long-term part­ner­ships, bet­ter deals and bar­gain op­por­tu­ni­ties

Long-term part­ner­ships should re­sult in a con­sis­tent prod­uct, while also help­ing to avoid in­ter­rup­tions caused by chang­ing sup­pli­ers. The greater the num­ber of yearly ser­vice con­tracts with sup­pli­ers, the eas­ier it be­comes to plan op­er­at­ing bud­gets. Restau­rant own­ers can also look at work­ing on a re­bate agree­ment, where the sup­plier will give a per­cent­age back to the restau­rant, de­pend­ing on con­sump­tion. Restau­ra­teurs can mu­tu­ally ne­go­ti­ate ben­e­fi­cial deals, such as cross-pro­mo­tions. They can also look at con­sump­tion and re­quest free-of-charge items for or­ders over a cer­tain size. Restau­ra­teurs should look at top­i­cal dates. If there is a spe­cial oc­ca­sion com­ing up and there is the pos­si­bil­ity of plac­ing a larger than usual or­der for cer­tain prod­ucts, it makes sense, where pos­si­ble, to place the or­der well in ad­vance, al­low­ing time and space to dis­cuss the pos­si­bil­ity of se­cur­ing a bet­ter deal. Keep­ing costs as low as pos­si­ble by cre­at­ing dishes from scratch and us­ing lo­cal pro­duce wher­ever pos­si­ble is good prac­tice, since it will al­ways be cheaper than im­ported pro­duce. Buy­ing power is a valu­able as­set for new restau­rants. Be­come part of a big­ger group that has stronger buy­ing power, since this will help to re­duce sup­plier prices.

3. Man­age timely pay­ments

Smart busi­ness own­ers will have a wellde­fined an­nual op­er­at­ing bud­get, which is sep­a­rated by phases with rea­son­able rev­enue goals and cre­ated al­low­ing for worst-case sce­nar­ios. In this way, the team will be pre­pared to han­dle such sit­u­a­tions. One means of man­ag­ing timely pay­ments is to ar­range ex­tended credit limit con­tracts, which en­sure plenty of time for pay­ments and man­ag­ing cash­flow.

4. Un­der­stand the shift in busi­ness strate­gies

It’s dif­fi­cult to main­tain a suc­cess­ful busi­ness in to­day’s mar­ket con­di­tions. Sup­pli­ers are keen to avoid credit pay­ments for newly opened restau­rants and are quick to halt deliveries if there are any de­lays in pay­ments.

5. In­vest in ven­dor man­age­ment

In­vest­ing in ven­dor man­age­ment is im­por­tant to en­sure that com­mu­ni­ca­tion and doc­u­men­ta­tion be­tween the restau­rant and sup­plier run smoothly. Han­dling it in-house is not ad­vis­able, since this could lead to mis­com­mu­ni­ca­tion and mis­takes in the con­tracts.

Be­come part of a big­ger group that has stronger buy­ing power, since this will help to re­duce sup­plier prices

6. Re­solve dis­agree­ments pro­fes­sion­ally and know when to search for new ven­dors

The most com­mon is­sue that causes prob­lems be­tween sup­pli­ers and restau­rant busi­ness own­ers is late pay­ments. If this hap­pens, restau­ra­teurs must en­sure the busi­ness is not af­fected. One way of do­ing this is by of­fer­ing cash on de­liv­ery pay­ments un­til cred­ited pend­ing pay­ments are set­tled in the case of fi­nan­cial dis­agree­ments. Is­sues such as de­lays in deliveries and in­con­sis­tency in prod­ucts should act as a red flag. Other signs to look out for in­clude spo­radic changes in pric­ing; of course, in­fla­tion means that the price of goods will in­crease, but only mod­er­ately. If you are not re­ceiv­ing reg­u­lar com­mu­ni­ca­tion from a sup­plier, it's time to look for a new one.

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