Episode 6 - Are Your Suppliers Helping or Hurting you?

Are Your Suppliers Helping or Hurting You?

Your business depends on other businesses, but do you really know if your suppliers are supporting your goals… or quietly undermining them?

In this episode, I share the story of a bakery owner blindsided by a last-minute supplier collapse, just as her busiest season was kicking off. And then I zoom out to look at the bigger picture: how to evaluate, strengthen, and even rethink your supplier and vendor relationships as part of your business resilience strategy.

Whether you buy ingredients, packaging, or use services like janitorial support or software providers, this episode gives you the tools to spot risks, assess values alignment, and build stronger partnerships that help your business thrive.

📦 What You’ll Learn

• Why suppliers and vendors are often your biggest hidden risks
• How to tell the difference between a reliable partner and a vulnerability
• A 5-category Supplier Scorecard you can start using this week
• Early warning signs that a supplier relationship may be failing
• A 90-day action plan to evaluate and strengthen your supplier ecosystem

🧾 Quick Tool Highlight: The Supplier Scorecard
Evaluate your top suppliers in five categories:

• Delivery & Reliability
• Quality & Consistency
• Values & Standards Alignment
• Communication & Responsiveness
• Financial Health & Backup Readiness

📉 Any partner scoring below 7? Add them to your resilience radar.

💌 Questions? Feedback?
Reach out at anca@3pimpactconsulting.com - I’d love to hear from you.

🎧 Listen now - and take the first step toward a more resilient business.

I am the founder of 3P Impact Consulting and I help small businesses build long-term resilience through sustainable practices. I adapt tools used by big corporations to fit the reality of purpose-driven small business owners - so they can grow with confidence, even in uncertain times. 

💻 Learn more about my work at www.3pimpactconsulting.com/services
📬 Subscribe to my blog and newsletter at www.3pimpactconsulting.com/resources

Transcript

Episode 6: "Are Your Suppliers Helping or Hurting You?" 

Let me tell you about Ana, who runs a small bakery that specializes in holiday-themed treats. Every year, her biggest revenue season is the six weeks leading up to Christmas - we're talking about 40% of her annual income.

For three years, she'd worked with the same packaging supplier for her signature holiday gift boxes. They seemed reliable enough - always delivered on time, at decent prices. Ana never thought to dig deeper into their operation.

Then, in mid-November of her fourth year, just as orders were pouring in for Thanksgiving and Christmas, she got a call. Her packaging supplier informed her they were filing for bankruptcy and couldn't fulfill her order. Just like that. No warning, no backup plan, no alternatives offered.

Ana was stuck with hundreds of holiday orders and no way to package them properly for gift-giving. She scrambled to find alternatives, ended up paying five times the usual cost for rush orders from multiple suppliers, and still had to disappoint customers with delayed deliveries and mismatched packaging.

The financial hit was brutal, but the reputation damage was worse. Customers who had been loyal for years started questioning whether they could count on her business. Some moved to competitors. It took Ana nearly three years to fully recover her customer base and her holiday sales numbers.

There were warning signs in the previous few months - the payment terms change (they wanted the money 2 weeks earlier), the staffing cuts (they let go 2 drivers), - classic indicators of a business in financial distress. Ana just didn't connect the dots.

Listen to today's episode to find out how she could have limited her loss, or avoided it altogether. 

 [intro]

First, I want to apologize for releasing this episode so late after the last episode. My mom had some heart problems and she ended up having an open heart surgery. Everything is ok now and she is home recovering nicely, but she had a few complications after the surgery, and that was a little scary. But having gone through that, and seeing first hand how overwhelming it is to have a close family member having a serious medical problem, my determination to help small business owners build a resilient business grew even more. You have to have good systems in place to be able to attend to your family when needed and your business to continue running successfully. 

Ok, back to our episode…

In Episode 5 we talked about digital door locks - protecting your business online. I mentioned that your business is only as strong as your weakest link. Well, today we're exploring another critical weak link that many small business owners don't think about until it's too late: the businesses you depend on to operate.

Today's episode is really a continuation of building that business resilience we've been talking about. Episode 6 is: "Are Your Suppliers Helping or Hurting You?"

Why This Topic Matters 

Fact: you rely on others to run your business.  Whether it's ingredients for your restaurant, packaging materials for your products, cleaning services for your facility, or software to manage your operations - if they don't deliver, you can't deliver.

And also fact is that: your customers won't blame your supplier when something goes wrong. They'll blame your business. When Ana's customers received their delayed holiday orders in mismatched boxes, they didn't care that it was the packaging supplier's fault. In their minds, Ana's bakery had failed them.

This is especially critical for small businesses because you typically have fewer alternatives and less negotiating power than large corporations. When your main ingredient supplier has problems, you can't just switch to supplier number two tomorrow like a big company might (unless you already build a connection with them as part of your business resilience plan, that we talked about in episodes 2 and 3).

Vendor reliability isn't just an operational issue - it's a resilience issue, a reputation issue, and a growth issue. Your supplier relationships impact both your financial stability AND your ability to deliver on your values and promises to customers.

What We'll Cover Today

In the next 15 -20 minutes, we're going to explore how to understand your supplier and vendor relationships through a resilience lens.

We'll walk through the common and hidden risks in your supply chain that go way beyond just "will they deliver on time?". I'll introduce you to a simple supplier scorecard that helps you look beyond price to evaluate the partners who can make or break your business.

We'll discuss what to look for in terms of values alignment and partnership potential, identify red flags that signal problems before they become crises, and talk about how to build stronger, more resilient vendor relationships.

By the end, you'll have a practical framework for evaluating your current and future suppliers and a clear action plan for strengthening these critical business relationships.

Clarifying the Terms: Suppliers vs. Vendors 

Before we dive in, let me clarify something. You'll hear me use the terms "suppliers" and "vendors" throughout this episode, and I want to make sure we're on the same page.

Technically, suppliers usually provide the raw materials, ingredients, components, or products you need to create what you sell. For a bakery, that's flour, sugar, eggs. For a hot sauce manufacturer, that's peppers, vinegar, bottles. 

Vendors, on the other hand, typically offer services, software, equipment, or support functions that keep your business running. Think cleaning services, equipment maintenance companies, your point-of-sale software provider, marketing agencies, or accounting firms.

For today's discussion, when I say either "supplier" or “vendor”,  I'm including both. Whether you buy ingredients, goods,  food-grade containers, rely on a printing company for your labels, or use a janitorial service to keep your facility clean, they're all part of what I call your resilience chain.

I want you to think broadly about every business partner you depend on to operate successfully. Because a failure by your cleaning service could shut down your food production just as quickly as a failure by your ingredient supplier.

Your Supply Chain as a Risk and a Resource 

Let's start by looking at your suppliers through the risk management lens we developed in Episode 3. They play a dual role in your operations - they're both a resource that enables your success and a potential risk that could disrupt everything.

The obvious risks are things like late deliveries, quality problems, or sudden price increases. But there are hidden vulnerabilities that many small business owners never consider:

Financial stability risks: What happens if your key supplier goes out of business? Like Ana's packaging supplier, they might seem fine right up until they're not.

Quality consistency risks: Maybe your ingredient supplier starts cutting corners to reduce costs, affecting your product quality without warning you.

Values and compliance risks: What if you discover your supplier uses unethical labor practices or doesn't meet food safety standards? Suddenly your business reputation is at risk.

Geographic concentration risks: If all your key suppliers are in the same region and a natural disaster hits, you could lose access to everything at once.

Technology and cybersecurity vulnerabilities: Remember Episode 5? If your suppliers have weak cybersecurity, hackers could use them as a backdoor to access your systems and data.

The good news is that suppliers can also be a great asset. A great supplier doesn't just deliver products - they become partners in your success. They help you innovate, they warn you about market changes, they work with you during tough times.

The Supplier Scorecard Tool 

Now let's talk about how to actually evaluate your suppliers. I want to introduce you to a simple supplier scorecard that looks at more than just price and delivery times.

Think of this as creating a report card for each of your key business partners. You'll evaluate them in five categories:

First category: Delivery and Reliability. Do they consistently meet deadlines? How do they handle rush orders or schedule changes? What's their backup plan if their normal operations get disrupted? Score this from 1 to 10.

Second category: Quality and Consistency. Are their products or services consistent from batch to batch, month to month? Do they have quality control processes you can trust? Do they stand behind their work when problems arise?

Third category: Values and Standards Alignment. Do they operate in a way that supports your business values? If sustainability matters to you, are they making efforts in that direction? If food safety is critical, do they have proper certifications? Are they treating their employees fairly?

Fourth category: Communication and Responsiveness. How quickly do they respond to questions or problems? Do they proactively communicate about potential issues, or do you always find out after the fact? Do they help you solve problems or just take orders?

And fifth category: Financial Health and Backup Readiness. Are they financially stable? Now, I know most small business owners don't run formal credit checks on suppliers - we tend to rely on relationships and references. But there are warning signs you can watch for without hiring a credit agency. Do they have contingency plans? Are you overly dependent on them, or do you have alternatives? Do they seem to have other stable customers? Have they mentioned cash flow issues or asked for payment term changes?

For each category, give your supplier a score from 1 to 10. Add them up and divide by 5 for an overall score. Anyone scoring below 7 overall should be on your watch list for improvement or replacement.

Red Flags to Watch For 

Let me share some early warning signs that signal supplier relationship problems before they become crises:

Communication breakdown patterns: They stop responding quickly to emails or calls. They start giving vague answers about delivery dates or quality issues. You find yourself having to follow up multiple times to get basic information.

Quality inconsistencies: You notice more defects, variations in taste or appearance, or packaging problems. They start making excuses for quality issues instead of fixing them.

Payment or financial stress signals: They ask for payment terms changes, like cash upfront instead of their usual 30-day terms. They mention cash flow problems or start offering unusual discounts to get quick payments.

Over-dependence indicators: (One vendor = single point of failure) You realize you're getting 80% or more of a critical input from one supplier. If they have problems, you're stuck.

Watch for these patterns. One incident might be normal business hiccups. Multiple red flags together? That's a signal to start looking for alternatives.

Building Stronger Partnerships 

The goal isn't just to evaluate and potentially replace suppliers. It's to build stronger partnerships with the ones who are aligned with your goals.

Start by communicating your expectations clearly. Don't assume they know what matters to you. If on-time delivery is critical, tell them. If sustainability is important, explain why and ask about their practices.

Ask resilience questions: "What's your backup plan if your facility has problems?" "Who are your key suppliers, and what happens if they can't deliver?" "How do you handle quality control?"

Consider collaboration opportunities. Maybe you can help them understand your seasonal patterns so they can plan better. Maybe you can work together on sustainability initiatives or quality improvements.

And don't forget - this is a two-way relationship. Be a good customer. Pay on time, communicate your needs clearly, and treat them as partners in your success rather than just suppliers you order from.

The best supplier relationships feel like partnerships. You're both invested in each other's success.

Practical Implementation

You don’t have to do everything at once. A phased approach over 90 days can help you get a solid handle on your supplier health without disrupting your day-to-day operations.

In the next 30 days:

●     Make a list of your top 3–5 critical suppliers or vendors.

●     Use the scorecard approach to evaluate each one across the five categories: reliability, quality, communication, values alignment, and backup readiness.

If you’re not sure how to rate them, schedule a 15-minute check-in call or send them a short questionnaire.

In the next 60 days:

●     Start conversations with your mid-to-high risk suppliers.

●     Ask open-ended questions: What are they doing to stay resilient? Do they have backup suppliers? What changes are they seeing in your industry?

●     Begin researching alternate suppliers for the most vulnerable areas—even if it’s just identifying a Plan B.

●     Document the gaps or vulnerabilities identified.

In the next 90 days:

●     Review or revise contracts and agreements. Make sure expectations are clear and fair.

●     Set a recurring quarterly or biannual reminder to re-evaluate your suppliers using the same scorecard method.

Taking this step-by-step gives you a clear picture of where you stand, and what needs attention, without overwhelming your team.

Recap

Managing supplier relationships is critical to your business resilience. Let’s recap what we covered today:

We started by recognizing that suppliers are more than just transactions - they're partners in your success and potential risks to your stability. We explored hidden vulnerabilities beyond just price and delivery times.

I introduced you to a simple supplier scorecard that evaluates delivery reliability, quality consistency, values alignment, communication effectiveness, and backup readiness. We discussed red flags to watch for, that signal relationship problems before they become crises.

Most importantly, we talked about building stronger partnerships through clear communication, mutual support, and shared values - turning your suppliers from order-takers into true business allies.

Call to Action

Here's my challenge for you this week: List your top 1-2 critical suppliers or vendors - the ones that would seriously disrupt your business if they disappeared tomorrow.

Use the scorecard framework we discussed to rate each one in those five categories. Be honest about their strengths and weaknesses. Anyone scoring below 7 overall needs attention.

Then, pick one of them and ask a resilience question: "What's your plan if your operations get disrupted?" or "How do you ensure quality consistency?" Listen to their answers. If they don't have good answers, that tells you something important about your risk exposure.

I will add the Supplier Scorecard template link in the show notes. Use it as guidance to what to evaluate and how to score it. If I don’t get to do it by the time you listen to this episode, reach out to me to ask for it. 

About the Next Episode 

Now, speaking of partnerships and relationships that make or break your business, there's one group even more critical than your suppliers: your employees. Your team is the foundation of everything we've talked about in this podcast - from executing your business continuity plan to maintaining quality standards with suppliers.

Next episode, Episode 7, is "People First - Attracting and Keeping the Right Talent." Because you can have the best suppliers, the strongest cybersecurity, and the clearest priorities, but if you don't have the right people in the right seats, these won’t matter much.

We'll explore how to build a team that doesn't just show up for a paycheck, but actually cares about your mission and helps you build the resilient, sustainable business you're working toward.

Closing 

Until then, remember: your business is only as strong as the partners you choose to work with. Choose wisely, evaluate regularly, and don't be afraid to make changes when relationships aren't serving your goals.