My business hinges on selecting the right vendors to partner with to deliver products and services to my clients. To successfully build your business, you will have to rely on outside help at some point to provide a service or take on a task that can't be handled by your core team. The right vendor relationship can make your life easier, but the wrong one can be a distraction and detrimental.

Pay close attention to some of these key indicators of a potentially problematic vendor:

Trust Your Instincts

Just like interviewing an employee, if something feels off in your interactions with a potential new vendor, trust your instinct before you sign on the dotted line.

The more time you plan to spend with a vendor, especially on key business objectives--overall strategy, finances or marketing--the more important the chemistry is between your organizations. Be sure to include other employees that will work with the vendor and ask for their candid feedback.

Pay Attention to the Proposal

The proposal is often the first deliverable a new vendor sends your way. This first impression will give you an idea as to the quality of the vendor's work once they start the project.

If they don't pay attention to the details in the proposal, their approach is not clear or you don't understand how they charge, it will not get better once the relationship is underway.

See How They Treat Others

When a new vendor comes in to meet you they are on their best behavior because they know you are the decision maker. I pay attention to how the vendor treats those that are not making the decision--from my assistant to the receptionist.

At the end of the day, the vendor will interact more with my team than I and it's important that they are equally respectful and helpful to those that are not signing the check.

Don't Manage Your Vendor

Be wary of the time it takes you to manage the relationship. You are outsourcing a part of your business for a reason. Don't let a disorganized or mismanaged vendor distract you from the important role of growing your company.

From the start, they should insist on weekly check-ins and provide you with timely status updates on their progress and deliverables. Remember, when you take the time to manage their business, you are building their bottom-line, not your own.

Nickels and Dimes

One of my personal pet peeves is working with a vendor that is constantly coming back to me for tiny dollar amounts. This is especially irksome when I am working with a vendor that will have a longstanding relationship with my organization.

Case in point, I had a vendor that I was spending a significant amount of money with every month revise an invoice because they had forgotten to include a $50 charge. This amount represented less than 1% of what I was paying them every month and required my company to re-process the invoice in our systems. The rework on my side alone cost more than the $50 oversight. For the sake of the relationship, it would have been better for them to absorb the cost and make it up further down the road.

When I check recommendations for vendors, this is one of the first questions I ask a potential vendor's other clients.

As you select vendors to help you grow key parts of your business, take the time to pay attention to these tell tale signs of a potentially bad relationship.

Do you have other tips I didn't include here? Feel free to send me a line @eholtzclaw--I would love to hear from you.

Published on: Feb 3, 2015