Small Business Mistakes When Working With Vendors
For small businesses, partnering with the right vendors can be key to success, but managing vendor relationships can sometimes lead to costly mistakes. To avoid these pitfalls, it’s crucial to maintain control over vital aspects of your business. Here are common mistakes small businesses make when working with vendors, and how you can avoid them.
1. Not Owning Your DNS
One of the most overlooked mistakes small businesses make is not owning their DNS (Domain Name System). The DNS is essentially the phonebook of the internet, directing users to your website. If a vendor sets up your DNS and retains ownership, you lose control over your domain. This can lead to serious consequences if you ever part ways with the vendor.
Why It Matters:
If you don’t own your DNS, your vendor has control over your website’s domain. If something goes wrong, whether it’s a billing issue, a contract dispute, or simply the need to change providers, you could lose access to your domain.
In the worst-case scenario, you could find yourself locked out of your website or even lose it entirely.
Solution: Always ensure that your company is listed as the owner of the DNS, and keep all login credentials secure. Use reputable services like GoDaddy, Namecheap, or Google Domains where your business, not a third-party vendor, has ultimate control.
2. Not Owning or Hosting Your Documents
Many small businesses rely on vendors to handle document management, but this can create issues if those vendors control where and how your critical documents are stored. Allowing a vendor to host important business files without maintaining ownership can be a risky move, particularly if you need to access or migrate them later on.
Why It Matters:
You risk losing access to important data if the vendor goes out of business or if you need to terminate the relationship.
Relying on a third-party service without a backup can result in downtime or data loss during transitions.
Solution: Ensure your documents are stored in systems that you control, such as Google Drive or Microsoft OneDrive, and always retain ownership of these files. Make sure you have access to backups and don’t depend entirely on a vendor to manage them.
3. Allowing Vendors to Handle Hosting and Billing for Your Website
Another common mistake is allowing a vendor to manage both the hosting and billing for your website. While it may seem convenient to let a third party take care of everything, it can put you in a vulnerable position. If the relationship sours or there’s a billing issue, you could lose access to your website or experience service interruptions.
Why It Matters:
If the vendor is responsible for hosting and billing, they control your website’s lifeline. A billing issue, missed payment, or even a clerical error can cause your site to go offline.
Your business could be held hostage to unreasonable pricing changes or service disruptions if you’re not in control.
Solution: Maintain ownership of your website hosting account and handle billing through your own channels. Use a reputable hosting provider like Bluehost, SiteGround, or AWS where you manage the service. Even if you hire a vendor for web development, keep the hosting and billing under your control.
4. Not Owning Shared Documents
Collaborating on shared documents is essential in today’s digital age, but failing to own these documents is a mistake that many small businesses make. Whether it’s a project management file, marketing content, or customer data, if a vendor controls access to shared documents, you could be at risk.
Why It Matters:
Vendors may restrict access to shared documents if a contract ends or there’s a dispute, leaving you without vital information.
You may face delays in obtaining important files if your vendor is unresponsive or unwilling to share them promptly.
Solution: Make sure that any shared documents live in platforms where you have full access and ownership, such as Google Workspace or Office 365. Establish clear protocols that ensure your team always has access to the files they need.
5. Failing to Document Vendor Agreements and Responsibilities
Another major mistake small businesses make is neglecting to thoroughly document vendor agreements and responsibilities. Clear communication and written agreements are essential for avoiding misunderstandings and ensuring that both parties know what to expect.
Why It Matters:
Without a clear, documented agreement, disputes over deliverables, deadlines, and payment terms can arise.
You could be left without legal recourse if the vendor doesn’t deliver as promised.
Solution: Create clear contracts that outline expectations, deadlines, deliverables, and payment terms. Ensure both parties sign off on the agreement, and regularly review it to ensure compliance. It’s also wise to have a contingency plan in place if things don’t go as expected.
Final Thoughts
When working with vendors, the key to avoiding costly mistakes is maintaining ownership and control over your business’s essential assets. By keeping ownership of your DNS, hosting, documents, and shared files, and by thoroughly documenting agreements, you can avoid the common pitfalls that small businesses face when working with vendors. Taking these proactive steps will help ensure your business remains secure, agile, and prepared for any future changes.
Need help getting the digital part of your business under your control, reach out today.
