Right now is an exciting time for small businesses. No longer just the foray of local, family-run cafés, many of today’s small businesses are cutting-edge technology and manufacturing companies that have a real chance of displacing bigger legacy suppliers.
Modern small businesses may be well-funded in many cases, but their supply chain profile tends to be riskier. Because they have yet to prove themselves and their staying power, they can’t afford to get their global supply chain wrong.
From the first moment, it’s important for early-stage businesses to focus not only on financing and the products themselves, but also the supply chain aspect. They will earn the respect of their customers and investors alike by showing a firm grasp of this crucial element of business.
Due Diligence Can Make or Break You
Unfortunately, there are some threats early on that could compromise a fledgling business’s supply chain in the long run. For example, it’s important to look out for predatory suppliers. Supplier selection should be a careful process that is based on knowledge and research rather than chance. In other words, watch out for cold-call suppliers who prey on early-stage incubators looking for easy marks.
It’s also important to look out for free samples from suppliers. Some suppliers might provide such samples to be used prototypes, but it’s important to be aware that they could be discontinued items that you will not be able to find again.
You need to take a very cautious approach to protecting your intellectual property. All suppliers should be asked to sign non-disclosure agreements that also cover their key suppliers, and you need to include confidentiality clauses in your prints and specifications.
It’s no longer enough to simply have a good product and a passionate team behind it. If you want your small business to succeed, due diligence in the supply chain can give you a fighting chance.
This blog post was based off of an article from UPS Longitudes. Read the full article here.