Guide on How To Make A Contract With your Restaurant Suppliers

Where to buy goods? And on what conditions? Are some of the most important financial decisions you need to make in your food business. This means that your Restaurant Suppliers need to meet your requirements such as quality of the goods at a good price, payment terms, delivery schedule and other aspects which will decide, if would you do business with that supplier again that will make both sides happy.

You should also understand your supplier’s position, none should not be forced into a corner. Create a list of the factors that are important to you. Be prepared for a compromise before you start to negotiate with a supplier and decide what compromise you can or cannot accept and afford it. Note that your food business is not measured according to your sales, but the difference between revenues and expenditures that give you the chance that your restaurant can grow.

Price and payment terms

A good start is to define your priorities such as high quality goods, low prices or a specific delivery schedule. The key is to establish your desired outcome. Before making a contract, get your price list and compute how much each product costs from each supplier.

If you have ever bargained at a market, you should be familiar with some negotiating techniques:

1. Don’t accept the first offer. Ask what other things they can include in the given price such as promotional materials like, cups, aprons, shirts, shades. Make a low counter-offer. The supplier will come back with a revised offer.
2. If the price is suspiciously low, you should check if the supplies are high quality and what kind of delivery schedule will be?
3. If the price includes items that you don’t need, try to lower the price by asking to remove those items from the transaction. Be careful, don t buy things which you don’t need even at a cheap price.
4. Don’t Squeeze the Prices too Low. If you haggle the price too low by trying to walk away from the negotiations, you may end up getting a poor deal. They may have to cut costs elsewhere in an area such as delivery service, which could be costly to you in the long run. If you’re a main customer of the supplier you could simply ask for bulk discounts to get best possible deal.
5. Importance of good will. In the future, a good Supplier Relationship may help you get even cheaper prices and good deals. Try to give an impression that you are approaching the negotiations positively without saying your position. In any case, the more confident you talk about what you want, the more probably you are to get it.
6. Be sure who are you talking with. Recognize the key staff in the supplier’s business, there is no point trying to squeeze concessions out of a junior member of staff who doesn’t have the authority to grant them.

Make a Research

Do some basic research about your potential Restaurant suppliers to let you know how valuable your business is to them. You may ask from restaurant and bar owners around you about references of local suppliers, but some supplier would be happy to put you in touch with some of their previous customers. Make sure your potential suppliers have the cash flow to deliver your needs, whenever you need it. This is especially important if you are entering into a long term contract. If you choose a supplier which has a lot of competitors, you will be in a much better position than you choose a supplier which has monopoly in your location. Also, the proper time of making a contract is very important. Make sure to make it during the end of month. Sales person may need to meet a monthly quota.

Negotiating with the suppliers

Ask the supplier before starting the negotiation to state the points he wants to discuss and you should do the same too. Make the supplier to restate the payment terms and any discounts offered. You also need to know about the common negotiation tactics.

Making a contract with the supplier

Sometimes, suppliers will tempt you with low and unrealistic prices with the plan to raise it very soon. Do not allow them to do business with you this way. Don’t sign a contract if they cannot guarantee a constant, real price, or if they will demand you to buy items only from them. Keep the opportunity open to buy from another supplier. Once you have already made a deal about all points and agreed on what the contract will cover, it is best to get a written contract made and signed by the both of you. Consider getting a legal advice when making up your standard terms and conditions that protect your interest and that transfers legal responsibility for any problems to the supplier. Inform the supplier in writing how you mean to use the goods and ask for a written confirmation for the items, which he is selling to you, to be appropriate. It is a good idea to clearly ask about any hidden problems and to keep a written record of all assurances given.

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