July 21, 2010

Small Business Vendor or Supplier

 Have You Done Your Small Business Homework?
#3 of a 3 Part Series

Business Rule# 9- Find a Vendor
Before you can begin to think about suppliers you have to figure out what industry you are in. If your business idea is to start a Hair Store then your industry would be:

448150 Clothing Accessories Stores- The industry comprises establishments primarily engaged in retailing single or combination lines of new clothing accessories, such as hats and caps, costume jewelry, gloves, handbags, ties, wigs, toupees, and belts. (Census 2007)

To find out what your industry is you can log on to http://www.census.gov/eos/www/naics/ and enter your business on the left hand side of the page and it will give you your business NACIS code. (Write this down because you may need this later.) Click on your business NACIS code and it will give you a description of what type of business fall under that category as well as other information.

Now that you know what industry you are in, it is now time to think about what your business needs are.

Begin your search on the following:
*·    What kind of equipment and materials and service will you need?
*·    Who are the leading and or recommended vendors providing those items?
*·    What are the costs involved?
    Once your business needs are identified it's time to find suppliers. If you are selling a service and not a product think about if there will be some sort of literature or product that you will be required to offer or give as part of your marketing plan. If that is the case then think about who will supply that item. Figuring out where to find suppliers can be a tedious task if you don't know where to look.

    Below are a few resources of where to begin your search

     *    Ask Around
    Like the old saying goes, 'you never know who knows who'. Talk to your friends, family and coworkers about your business plans and see if they have any suggestions on possible suppliers.

    *    Networking
    Try asking someone already in the business for a recommendation or possibly if you could purchase their over stock.

    *    Trade associations
    Search online for trade associations for your industry. This can be a valuable tool in not only locating suppliers but gaining knowledge about your competitors.

    *    Online auction sites
    Online auction sites such as eBay have an Industrial site where you can buy industrial supplies and products. EBay is more than just a bid and auction site for consumers but also caters to business industry as well.

    ·    Thomas Register/Thomas Regional/ThomasNet
    Thomas Register is a free resource for locating manufactures.

    *    MacRAE'S Blue Book
    MacRAE's is an industrial directory that allows you to search through one million different businesses.

    *    Online Directories
    Online directories have separate categories and sections for topics such as business. Yahoo! B2B directory can be a great resource to find a supplier.

     SBS Business Start-Up Rules 
     #7- Define Your Target Market
    #8- Identify & Analyze Your Competitors
    #9- Find a Vendor

    Utilizing business rules 7-9 will help you:
     ·    Define your target market and identify their purchase needs.
    ·    Identify and analyze your business biggest competition.
    ·    Discover your business industry classification
    ·    Locate potential suppliers

    Doing your research on your target market, competitors and suppliers will help you limit your risk of failure and increase your chances of solid start.

    Have you done your small business homework?
    Do you have a recommendation or tip on how to find suppliers? How tough was it for you to find a supplier for your business?

    "Copyright © 2010, Dawn Austin, Recipe for Small Business, writer, SmallBiz Stew. All rights reserved. Permission granted to reprint this article on your website without alteration if you include this copyright statement and leave the hyperlinks live and in place." 

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