by Gareth Cotten on 30/06/10 at 12:00 pm
What many business owners don’t do often enough is to question where there expenses are going, and the reasons behind increases (specifically the once a year ‘default’ ones from suppliers). Take the time to look at each of your input costs, and find out where there is room for negotiation on each one. You’d be surprised how many you can bring down just by asking the question.
Say to those supplying you that you value their service immensely, but you have realised a need to run your business that much leaner. Mention that you’d still like to continue the relationship with them, but you need to ask for something in return. This could be the deferment of a stated price increase, a request for extension of payment terms, or a discount for prompter payment.
This obviously carries more weight if you have identified suitable alternatives to them, and can supply proof of this if they press you on it (eg. competitor quotes).
Many suppliers will do whatever it takes to keep you happy and to keep your business. If you have been loyal to them for an extended period, and have kept them going through the worst of the recession, make sure that they know this, and ask them to meet you somewhere in the middle. Ultimately, the short time it takes you to make a handful of phone-calls and send a few emails could save you a small fortune…
Gareth Cotten is one of the growing breed of SA entrepreneurs with that ‘world-domination’ look in his eyes. Gareth runs the coaching and consulting practice 'Good Advice'. Gareth is also the 'course convener' for the University of Cape Town (Law@Work) Start and Manage a Small Business course and the University of Cape Town Basics of Financial Management course. View more articles by Gareth Cotten.