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5 min read

Hire vendors for your small business

Your business is up and running. You might need to branch out, delegate responsibilities that are out of your skill set or timeline, and bring in new faces as your company grows.

The third-party vendors—people or companies that provide goods or services directly to your business to aid in the operation of your business——you hire could significantly affect how your business operates and serves your customers.

Vendors can bridge gaps in knowledge or capacity and expand your reach as you navigate the market. They can be business to consumer (B2C) or business to business (B2B, also known as suppliers). Your vendors will also provide essential materials and services for your business to operate smoothly and professionally. 

Getting started: set clear goals

You might not have the need or resources to hire full- or part-time employees for certain purposes, like accounting, marketing, website design or legal services. That’s where vendors come into play as a cost-effective solution.

Think of it like planning a wedding. You’ll need a variety of vendors in myriad areas of expertise like the officiant, venue, photographer, florist, makeup artist, transportation provider and caterer.

Be concrete in your vision: what does your business need in terms of deliverables, tools, materials, products, services or skills? With your business plan in mind, you can find your gaps.

Here are some questions to consider:

  • What are your budget, capital and cash flow projections?
  • What are your priorities? (Refer to your lean canvas and create a ranked goals checklist)
  • Which specific tasks do you need to outsource and why? 
  • Would it be more of a help or a hindrance to do this task yourself? Or is it best left to experts?
  • Have you allocated time to grow your business? Is the timing right to outsource an item on your priority list?

Different businesses have different requirements in vendor relationships, which may be purely transactional to fill an immediate need, like ordering office supplies, hiring catering services for an event or renting equipment.

You may also build longer-term partnerships that require a higher level of trust and scrutiny due to the ongoing nature of the relationship and the potential impact to your business and customers. For example, you may hire an agency to do your digital and traditional marketing and help you build brand awareness. Or you may need to source a shipping company that will help you fulfill orders and get your products into the hands of customers.

Chances are your business is going to rely on a combination of transactional and strategic vendor relationships. Let’s say you’re a restaurant owner. Your business will rely heavily on vendors and suppliers to provide what is needed to open your doors (and keep customers satisfied every day). For example, you may need to source a vendor for your pop and alcohol, menu ingredients, takeout packaging, restaurant furniture, dishes, utensils and kitchen appliances. Your business will also need insurance, a security system, a point of sale system, delivery options, a general contractor or maintenance worker, and cleaning or waste management—ongoing services.

Research, references and reviews

If you’re looking for an individual vendor, check freelancing sites like Upwork or Fiverr. Find companies through online platforms, business forums and networking events.

It’s crucial to vet vendors and suppliers thoroughly to ensure a trustworthy and reliable relationship.

You may even opt to collaborate with another business to create something new and elevate both companies.

Start by confirming that a potential vendor is a registered business by looking up federally registered corporations on the Canadian government’s website or provincial ones through Canada’s Business Registries and on the Alberta government’s site. Then, check if they have appropriate insurance, like liability and Workers Compensation Board.

Ask your network for vendor recommendations and source legitimate references and reviews. Reputation is everything—go beyond word of mouth to research verified experiences and be aware of any suspicious or fake reviews. Visit the vendor’s website, social media and Google reviews to learn about the experiences of other clients.

Another option is to meet with clients of vendors in your field to ask about their experience: if the project was what they expected, whether it was on budget and on time, and how any roadblocks were handled.

As you conduct research, ask yourself if this potential vendor makes sense for what you’re trying to achieve.

What to look for in a vendor

What you want in a vendor relates to your objectives as a business owner. Is the vendor well-suited to the needs of your organization? Do they align with the qualities and values of your business?

Consider what’s important to you, which will be different for every entrepreneur. Develop criteria based on your needs.

Some qualities to look for in a vendor, regardless of industry:

  • Trust/reliability/credibility
  • Effective and clear communication style/professionalism
  • Informed on industry trends


Start small

Get a Statement of Work (SOW)—a document that defines the work scope, deliverables, cost and timeline—from your vendor. The foundation outlined in the SOW becomes part of the ensuing contract.

To get a sense of the working relationship and fit, start with a small request, task or contract. Opt to try a demonstration of the service or commit to something in the short term, like a month-long trial.

Depending on what the vendor provides and how complex it is, you may need to reach out to your lawyer to create a contract. If you’re registering for a third-party service like Square, for example, you don’t require a lawyer.

Begin with the end in mind

However long the partnership lasts, begin with the end terms in mind. How long is the contract? Scour the fine print to understand the nuances and what is included in its terms. Don’t be afraid to ask questions at the beginning to gain clarity and ensure your business’ needs will be met.

Other things to consider:

  • Do you have the same understanding of expectations and deliverables?
  • What happens if the project goes over budget or needs an extension?
  • Who owns any intellectual property? Are there reselling or reuse rights?
  • Is there a warranty?
  • What are the payment terms?
  • Will the vendor provide support in the event that something goes wrong?
  • What is the cancellation policy? Will your business incur any penalties?


Vendors reflect your company’s values

It’s important to contemplate what tasks are better left to the experts and to thoroughly research the people you hire. Remember to ask everyone in your network for recommendations and to start with small deliverables. Who you choose as a vendor is a reflection of your company’s values.

Your next steps: learn the right questions to ask when searching for the right location for your business. Don’t have a physical location? Learn how to create a filing system.