Video: Module 8 – New Suppliers

Presenter: Bruce Lacroix

Speaker Bruce Lacroix

So basically a supplier is anyone who provides you with any good or service that you need to run your business. So for an example, if you're manufacturing wooden clocks, and you're deciding that you're going to purchase the wood for the clocks, you're going to purchase the parts for the clocks, and the electrical innards for the clocks, and you're going to put this together and create your own, then you'll have suppliers that will of course you'll have to buy this stuff from. So you have a supplier for the wood, you'll have a different supplier maybe three or four suppliers for the parts of the clocks, you'll have another supplier for the electrical parts. You then take it, you put it together, you sand it, varnish it and ship it off.

So in your business plan you're going to show who are the suppliers for each of these products? What is the contact person? What is the where are they? What are their prices? Their shipping terms? And things like that. And then you also have services of course that a clock manufacturer would need. It's not just the parts of the clock, you have to have services like maybe an internet service provider, a long distance carrier, someone who does your shipping. Maybe you need bubble wrap to send these clocks off on. So all of these together need to be shown very clearly in your plan: who they are, where they are, who the contact person is, prices, and shipping and terms.

I'll give you another example. You may be opening a kind of retail store. So in any kind of retail store, "retail" means that you buy things from other people, resell them to the customers. So a retail store, unlike the clock manufacturer, will have a lot of suppliers. So if you're opening up a pet supply store, where do you get the collars and the dog bones and the flea powders and the cages and all the hundreds of things you might have in the store? You may then have a huge list of suppliers. But the theory is still the same: Who are the suppliers? Where are they? Who is the contact person? Name, address, phone number? Terms. Do you pay all up front? Can you put something down? Do they want to be paid by credit card? Is it a certified cheque? Did they allow you to buy now and then give you 30 days to pay after which they charge interest?

So all of these kinds of things every business has to think about. If you have a back up for all of those major suppliers, chances are that you won't get caught in any of those supplier problems of strikes or resale or price jacking or going out of business. So in your business plan, list of suppliers, all of that other information, and have a back up for each. It will work pretty well.

What you might want to do, how you might want to put this in your business plan is you might want to prepare a chart. And a chart would show on one side all the different suppliers' names, and then across the top you'd have "contact person, terms, pricing," so you can, you know, sort of compare and show all of your different suppliers.

Basically that's all we have to say about suppliers.

Transcript provided by: Accurate Realtime Reporting Inc.

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