It doesn’t matter what industry you’re in, how much experience you have with your niche, or how much of a corporate genius you happen to be. If your suppliers and vendors aren’t all that great, they’re going to hold your business back.

It’s a big mistake to think that all suppliers of a certain product are going to be pretty much the same, and manage your suppliers and vendors with any degree of apathy. Here, I’ve listed some important advice for evaluating your suppliers.

Set performance indicators

Before you order a single item from any company, you need to have a clear idea of the characteristics you need your suppliers to demonstrate and maintain through the course of your relationship. This should quickly be translated into specific, measurable criteria for tracking and evaluating your suppliers and vendors on an ongoing basis.

You should consider how large the company is, the certifications they hold, their quality management systems, and past financial stability. If there’s one thing that should immediately strike a supplier from your list, it’s a lack of transparency.

Take a professional supplier like AmCraft Manufacturing. Their site has a whole section of case studies which gives you some great insight into how well they perform as a company. If a business doesn’t have so much as a single testimonial, move on!

Create a solid evaluation method

A few decades ago, keeping tabs on your suppliers was pretty tough work. Now, with all the different technological resources start-up owners have access to, you’ve got no excuse! You can now use a wide range of methods for evaluating a supplier’s performance, such as surveys, evaluation forms, system metrics and applications.

One of the best ways to track your supplier performance is through customized programs you can create through accounting and management software like QuickBooks. When it’s carefully crafted, a customized solution will ensure that all your metrics and functions are specific to your business, and your supplier relationships. When you’re trying to do something so important, you obviously don’t want any kind of detail slipping through gaps in the net.

Decide who’s calling the shots

After you’ve established the things you’re going to be measuring to evaluate your suppliers, it’s important to decide who in your company is going to be in charge of organizing and reviewing all that data. This is going to depend largely on how much resources you have for evaluating your supplier and vendor performance.

Depending on the current state of your business, you could end up assigning one person or a whole team to a certain group of suppliers and vendors. The trick is dividing up your available workforce to make sure the whole task is being managed as efficiently as possible.

For instance, if you have a supplier who has a massive sway over your overall profit margins, you may want to have your chief financial officer on the job. With less important suppliers and vendors, you may only need the purchasing and procurement officer in charge of monitoring performance.