Negotiate Prices with Suppliers
However passionate you are about running a restaurant – don’t forget that you are trying to make money. Unless you are loaded and are simply running a restaurant business as a hobby to keep you amused, you will probably want to keep costs low and profits high. The prices you get from your suppliers – for meat, fish, fruit and vegetables, as well as wine, laundry services and all those other detail that you will need to think about – will make a great difference to your profitability.
Why Do You Need to Negotiate?
When you start to run your own business, you will realise pretty quickly that you will need to get over that awkward feeling of negotiating prices. If you do not have any such qualms, then good on you, but most people, at least initially, feel a little bit funny about asking for discounts or haggling over prices.
Don’t forget that the better your negotiating skills in the early days, the easier you will find it. There is a glorious knock on effect of learning to negotiate effectively – the obvious one is that you will pay less for the same thing. You will also find that you are able to maintain a good price with your supplier as they will know that you are not one of their ‘soft touch’ clients. You will also have a great boost of confidence from having successfully negotiated favourable prices from your suppliers, which will carry through to other areas of your business planning and operations.
Make a Preferred Suppliers List
Initially, you will need to find the potential suppliers that you can negotiate with. If you have worked in the restaurant trade before, you will probably already have a list of suppliers that you have used before. If not, a good way to gather a list of possible suppliers is to ask the owners or head chef at local restaurants that serve good food. They will usually be pleased to help as it will be good for their relationship with the supplier.
Once you have a list of potential local suppliers, do some business planning and ask around. See if they have good reputations, offer reasonable prices and have a website or brochure that can tell you a little more about them and their business ethics.
When you have narrowed down the list to suppliers that you would like to work with, call them up and ask for them to come in and see you. Arrange a few meetings in one day so you can do direct comparisons.
They will usually bring with them a range of their products to try. You can talk about prices then, too, but do not give too much away or they will think the deal is in the bag and not try so hard to win your business.
Don’t Negotiate Too Hard!
You will now probably know who is likely to be your suppliers, going by how much you liked them, how flexible they were and the quality of their products. Call them and let them know that you have put them on your preferred suppliers list and will be reassessing the list after the first month of business. Then negotiate the prices. While you want to make sure that you get the best deal possible, do not negotiate so hard that do not want to do business with you or they are making so little profit on your contract that they won’t care if they loose it.
