Is your service provider or supplier failing? How do we know when to replace them and how do we go about following it through?
This episode fits under the pillars of thought leadership and actionable education, and features our host, Jane Tweedy Founder of FAQ Business Training.
Disclaimer – All information provided today is general in nature. Please reach out to Jane if required for personalised advice.
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Season 2 Episode 3 FAQ Business Podcast transcript | Is it time to fire your service provider or supplier?
00:00 Is your service provider failing?
Are you working with a service provider or a supplier that is failing to provide service or consistent quality product? Are they a person you’ve dealt with for years, or you’re friendly with, or just a nice person you don’t want to end the business relationship with.
00:17 Is it time to fire your service provider and how to do it
But for your business and its success, it may be necessary to end that relationship? Well in today’s episode of the FAQ Business Podcast, I your host, Jane Tweedy will be going through exactly this, whether or not it is time to fire that service provider or that supplier, and if so, how to go about it.
00:44 Welcome and introduction to Jane Tweedy
Welcome to the FAQ Business Podcast for business owners, covering four pillars actionable education, inspiring leaders, businesses like you, and thought leadership where we challenge your thinking. Hosted by myself, Jane Tweedy. I’m Founder and Lead Trainer of FAQ Business Training, where we want to avoid you getting ripped off or ripping yourself off. We’ll feature an amazing diversity of guests with lots to educate and inspire you. Let’s jump into today’s episode of the FAQ Business Podcast.
01:21 This episode came about through recent discussions with clients
Welcome to episode 3 of season 2 of the FAQ Business Podcast. Today’s episode has come about through recent discussions with clients, and is something that rears its heads quite regularly. This episode fits under the pillars of thought leadership and actionable education, and is brought to you today by myself, Founder and Lead Trainer of FAQ Business Training and Host of the FAQ Business Podcast, Jane Tweedy.
01:50 Change of service provider checklist available
You’ll be able to access a copy of a free download of the change of service provider checklist from our blog attached to this episode.
01:59 Recent example of client changing employees to contractors
In one recent example, a client asked me to meet with her to change her employees to contractors, which I thought was a little odd. When querying it a little bit further, it turned out she thought this might be a way to save her bookkeeping money, because her business had reduced.
02:18 Research showed paying every weekly what should have been charged monthly
And I asked how much she was paying the bookkeeper, and did a little bit of quick research online as to what other local bookkeepers might be charging for the same type of service. Turned out she was paying on a weekly basis, what many were charging on a monthly basis. Now, that could have been justified. But what was worse in her situation?
02:41 Should have been getting great service but was getting not service at all
You’d expect great service when you’re paying four or five times as much as the going rate. But instead, she wasn’t actually getting any service at all. She hadn’t heard from the provider for many months. When we looked at whether her employees should be employees or contractors, it really was that they should be employees.
03:02 Changing them would have put her at risk of audit from ATO
And by changing them to contractors, merely to save some money on the fees from the bookkeeper, she would be putting herself at risk of being audited from the ATO. Not a good place to be. For those not in Australia, the ATO is the Australian Taxation Office, clearly not someone you want breathing down your neck.
03:23 But the real problem was the bookkeeper charging for a service not provided
But she also wasn’t addressing the problem. The real problem was the bookkeeper, a service provider who wasn’t providing the service and was charging a lot to do so. So instead, I obviously suggested to her she contact the service provider, her bookkeeper, and have a discussion with them about the service and the cost, and whether something could be done to bring them more in line, given that her business had slowed down due to Covid.
03:52 She did not require as many hours and could maybe do some in-house
She did not have a requirement for as many bookkeeping services, as many hours. So surely the costs could be cut back, particularly if she maybe did some of the work in-house herself.
Now, if they weren’t going to come to the party, then at that time you would investigate replacing the bookkeeper with another bookkeeper or potentially bringing those services back in-house.
04:16 Had the business grown the opposite may have been needed
Now remember, alternatively, the change may have come about through the opposite of the business shrinking. The business could have been growing. Often we outsource tasks early on, things like bookkeeping, but as we grow, it is something we potentially bring back in-house, and we have an in-house accounts person that would look after all that sort of thing.
04:41 Consider where your business is and what has changed
So do consider where your business is at and whether things have changed, and that may necessitate a change to your service provider, or to your supplier relationships.
04:54 Another example the service provider had to resolve problems in original set-up
In another example, the provider was not responding to contact and she wasn’t doing the work she’d been asked to do, including simple tasks that, on the face of it, should really have taken five minutes to do maximum. However, eventually, the client did manage to connect with her service provider, and she found out that there had been some sort of issue in the set-up of the original business and therefore there was a complication that was going to take some time to resolve, which now have been. And therefore, what was meant to be a five minute task would now become a five minute task after these hours of fix ups had occurred.
05:35 Sometimes the problem is the human side of the relationship
The process to remove or change a service provider is typically quite straightforward. However, we know that there’s a factor here that we need to address first, and this is honestly why many of you haven’t dealt with problem service providers.
It’s because humans are involved. People are involved on both sides of the transaction. You are a human. The supplier or the service provider is a human as well. Neither of you may be ready to give up the business relationship.
You might be over it. They may be over it. Neither of you may be over it. But if somebody’s not willing to give up that relationship, just like a normal personal relationship, it can make it difficult to end that relationship with that service provider or that supplier.
06:29 If you don’t want to give them up be friends with them instead
Sometimes I hear, but they’re a nice person. I really like them. Well, they may be, but be friends with them instead. Don’t have them as your service provider or your supplier if they can’t fulfill the need.
06:44 Base decisions on hard facts and what’s right for your business
Service provider or supplier decisions should be based on hard facts, and what is right for your business, not just on whether someone is a nice person. Sure, that should come into it as well though, because if someone’s really unpleasant to deal with, we aren’t really going to want to continue dealing with that person. However, there is a difference between being nice and being a good person.
07:09 Don’t be the nice person be the good person – do the right thing
You’ve probably heard the saying nice people finish last, and I think in business this does happen a bit. So don’t be nice at the expense of your business, your customers, your mental health, and your happiness. Instead, be good. Go about things the correct way. Do the right thing. Communicate and you are doing good. You’re doing the right thing. But it is still ultimately leading to the termination of that service provider or that supplier.
07:40 How do you actually go about dealing with it?
So when things aren’t working, how do you actually go about it? How do you go and deal with this with the supplier?
07:49 Firstly find out if there is a problem – ask questions first
First of all, do you actually have a problem? You may perceive there is a problem when there may not actually be one. So like anything, it’s probably best to give the benefit of the doubt first up and ask the question first, before jumping in on some crusade, all excited and there’s not actually anything wrong. The service provider or the supplier may not even be aware of your need.
08:17 Maybe they didn’t get your e-mail
Maybe they didn’t get your email. And that’s happening a lot lately due to overzealous spam filters. One of my many email addresses, even puts .gov.au addresses constantly in the spam, which is very frustrating. So there’s no hope for small business.
08:35 Maybe they simply forgot to respond due to timing
Also, we’re human. Sometimes we get busy, sometimes we forget to respond. Or we may have thought we responded because we typed up the message, but we never actually hit send. And this can be a problem like for me, when I work late at night. I know that I’ve typed up the message to the person. But if I go to bed but leave the computer on, or not logged off overnight, come back in the morning and it’s done some sort of log off or reboot, I might come back in the morning and not realise that I haven’t sent that message, when I hadn’t. That can be really frustrating.
Whereas it’s great in my Gmail emails because I can just go schedule send at 8:00 am in the morning. Perfect. But sometimes we don’t want to send messages to let people know that we’re working at 2 o’clock in the morning.
09:23 If you have lost trust is it worth repairing?
Have you lost trust for your service provider or your supplier? If you have lost trust, it’s a bit like any other relationship. It can be a hard one to come back from. Do consider whether you can come back from the breach of trust and whether the issue is actually worth repairing.
Discuss your issues with that service provider. There is no point keeping things to yourself, and just getting yourself more boiled up and more frustrated.
09:53 They may be able to work better and fix the problem
The service provider or supplier may easily be able to rectify your problem, or adjust the way they interact with you to make the relationship work better and more effectively. Particularly if you have been working with a person for a while, or if you think they’re a good person, then give them a chance to change the way that they are working with you.
10:14 If they are unwilling to change then look for another provider
If the service provider is unable or unwilling to change, or don’t acknowledge there’s an issue, then the next step is to look to move to another provider. With a supplier, it may be a similar process, but it may be even more obvious because things like quality control may have been slipping, and you may be able to clearly demonstrate an issue with quality control.
10:39 It might be hard to pinpoint the issue but is more of a gut instinct
Whereas sometimes with the service provider that’s providing, say, for instance, coaching, it can be a little bit more difficult to pinpoint where the issue actually is. Sometimes it’s not really quantifiable, it’s more of a gut instinct that something’s just not working right.
10:57 Before you take the next step have a backup plan
So the first step may be, after talking to the provider and see whether anything can be resolved, is to investigate other providers. There’s no point terminating your current provider if you have no backup plan. Or if you don’t know how they actually compare to the market currently.
For instance, you may think your web designer maintenance plan is really expensive until you realize that actually they’re quite cheap in comparison to others on the market currently. So then it may be a case of going back to the first provider and just agreeing maybe a lesser service. Maybe you could do some of the work yourself rather than terminating them.
11:38 Make sure you check your original agreement to meet any clauses
If you do now determine you do need to leave this relationship, you do need to terminate the service agreement or the supplier relationship, then make sure you go back to your agreement. See if there are any clauses about termination and whether notice needs to be given.
11:55 Check if the new service provider is a good fit for you
So if you work out that there are definitely better alternatives out there, then take a step further, and actually make sure that one of these providers would be a good fit with you, would be a good fit for you, by doing your due diligence and meeting with them and agreeing terms and how they would actually physically take over.
12:16 Thoroughly check new agreement and get lawyer to check
You don’t want to end up with another problem because you didn’t take the time to thoroughly test them out in advance. Thoroughly read and if necessary, get a lawyer to check their agreement or the new contract, especially if it’s for something like production or manufacturing of a custom made item.
12:38 Complete a project plan for the transition
Make sure you complete a project plan for the transition. For instance, will templates be needed to be transferred from the existing manufacturer to the new one? Will you need to provide any background information? What sort of things will you need to get to the new one most effectively.
12:59 When your new provider is ready to go then terminate existing contract
Once you have the new provider set up and ready to go in the background terminate your existing contract. Give the notice that you are required to give. You should not need to go into the reasons for your termination at this stage because remember, you already discussed them earlier.
13:16 Remain professional at all times
At this stage, things could be handled professionally by the other party, or they could start throwing their toys or making your life very difficult. From your end, you can control your behaviour obviously. So remain professional at all times. You never know when that person may reappear, and also we want to be a good human. Treat others as we want to be treated ourselves.
13:43 Continue to monitor the new service provider
After the transition to the new provider continue to monitor the new provider’s service and make sure you have a check-in with them in a suitable time frame after starting. So depending on the frequency of the service or the supply, that may be in a week, a fortnight, a month, or even three months down the track. Remember, being nice may not work for you and your business. However, still be good. Do the right thing.
14:13 Checklist available to download
So in summary, as a bit of a checklist, and this will be available through a download on our blog. Is there actually a problem? Speak to them before doing anything else.
14:26 Try to negotiate changes
As long as trust has not been eroded, speak to them and see if you can negotiate some changes once they’re aware of your concerns. Be prepared to adjust the scope, quality and/or time if you want to seek a reduction in cost.
14:41 Investigate alternative service providers
Investigate other service providers to replace the one you want to end the relationship with. Maybe you need to renegotiate existing services instead.
14:51 Check your service agreement
If you determine termination is the way to go, check your service agreement to make sure you know the notice required and the actions to take to terminate the agreement or the contract.
15:03 Check any new agreement or contract
Do your due diligence before choosing your new provider. Make sure to check any agreement or contract for any add-ons and all that sort of stuff and know the handover process, especially where manufacturing is involved of a custom product for you.
15:19 Consider how the handover would work if taking back in-house
Alternatively, you may be taking back in-house, to yourself or to a new employee, for instance, an accounts person. So consider how that handover would work as well.
15:31 Give termination notice and monitor new provider
Give your termination notice to your existing provider and as allowed transition to your new provider.
Monitor the new provider and have a check-in with a suitable timeframe to assess how things are working. Remember, make the right decision for your business or be friends with them instead. I hope this has been useful. Thanks again for tuning into the FAQ Business Podcast.
16:02 Thank you for listening and please subscribe to the FAQ Business Podcast
Thank you for listening to today’s episode of the FAQ Business Podcast available on all good podcast services. You can subscribe today via FAQBusinessPodcast.com.au or directly on Apple iTunes, iHeartRadio or Spotify. Subscribe, follow, share and where able review our podcast or leave us a comment on either YouTube or our blog page. Thanks for helping us to help you the small to medium businesses who are growing and want to make a difference. Look forward to connecting with you again on the next episode of the FAQ Business Podcast.
Today’s podcast episode featured our host Jane Tweedy. Her details are as follows:
Jane is a Professional Certified Coach with International Coaching Federation (PCC with ICF), business advisor and trainer. She loves working with growing small to medium business owners who are doing the right thing, to help them do it right! Currently, Jane offers at least 50 live sessions a year to train small business owners.
Jane offers a variety of services to clients and her online school and membership was launched in late 2021. Jane’s focus for 2022 is building the membership and offering implementable small group training – something she finds is often the missing link.
If you are interested in training, speaking, or anything else Jane has to offer, please connect via email@example.com or via the contact forms on our websites.
faqbusinesstraining.com.au – our main site with a great blog
faqbusinesstraining.com – our new online school and membership site
faqbusinesspodcast.com.au – our podcast site
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