The importance of principles when handling suppliers

The way you treat suppliers is crucial to the success of your business. Joe Jobson, director and shareholder of Principle Estate Management, explains why.

 

We’ve all come across the poor reputations of the average “white van man”: scruffy vehicles, poor driving, wolf-whistling at work and rude to anyone who challenges him.

But if you treat your suppliers or sub-contractors as unimportant or unnecessary, that’s often the way they will end up behaving.

That’s why here at Principle Estate Management we pride ourselves on treating them as important partners and extensions of our own business. And as a result, they behave like proud members of our team.

It’s not a simple process, however, and there are several key steps to make sure you achieve that kind of relationship with your suppliers.

 

1/ Background details. Here at Principle, we start by carefully vetting all suppliers and requiring a comprehensive application form to be completed with supporting documents.

We then review these details before adding them to our system – and before any work is undertaken.

Strictly following this system enables us to diarise important factors such as the expiry date of a supplier’s public liability insurance – and no new orders are raised if this is out of date.

The same background system records the precise types of trade provided and the areas of operation a supplier can undertake.

Treating such details carefully is quickly noticed by the contractors themselves, and as a result we find they immediately up their game if needed. They know we care about their quality, and therefore they make sure they deliver it.

This matters because our soft services, such as cleaning and grounds maintenance, are seen every day by residents, who are our end-customers, and we want them to know that contractors are important to us.

 

2/ In-depth knowledge. We maintain a dialogue with all our contractors, including regular meetings with those we use a lot, as we feel you need to know your contractors as well as you know your properties, clients and customers.

This knowledge then enables us to match the right contractor to the relevant development.

It’s not just Principle which makes this decision: it’s important to discuss contractor selections with clients, especially with residential management company directors.

Also, a slightly different contractor selection process is needed when dealing with major works or qualifying long-term agreements, where formal consultation is required under Section 20 of the Landlord and Tenant Act 1985.

But wherever possible, we try to use local, environmentally friendly and reactive contractors, as we’ve found that residents prefer this.

At times, we can also obtain good prices by using larger contractors, and this can be quite effective for testing types of works rather than maintenance works, for example the testing of lightning conductors.

In terms of knowing what works are required, our internal IT systems swing into action by creating an asset register at each property level, listing all items on each site which require a testing or maintenance regime to comply with statutory or best practice requirements.

This means that after tendering the contract an order is placed, and once we know which contractor we’re using the system will confirm the inspection dates, which are then diarised.

 

3/ Swift payments. Another way we treat our contractors properly is to pay them all on a weekly basis. There’s no way we ever want any of our suppliers chasing a monthly bill that’s weeks overdue.

Paying promptly might create extra administration for us, but we know that it means we have happy suppliers who then have the cashflows to pay their own staff on time.

A lot of the suppliers we use are small businesses and they really appreciate this – and have commented on it directly to us.

 

4/ Feedback. Talking of comments, we take what our suppliers say very seriously. We recently conducted an anonymous online survey of all our suppliers to ask how they felt about the way Principle treats them, and the results were really encouraging.

As many as 68% said we were ‘Good’ or ‘Very good’ at giving feedback on quotes submitted where they were unsuccessful in getting a particular job. No-one said we were ‘Poor’ or ‘Very poor’, although 32% said we were only ‘Fair’ and so we have made an internal commitment to improve our feedback in this area.

Over 90% said we were ‘Good’ or ‘Very good’ when asked if we paid invoices promptly. We were pleased with this response.

We were rated as ‘Good’ or ‘Very good’ by 65% of contractors at asking them to deal with matters using their full range of services, while 32% rated us as ‘Fair’. We have now reviewed our system to make sure staff understand the full range of services contractors can provide so that we can use them when needed.

When asked to rate how good we are at asking contractors to deal with matters within their core operating area, over 85% rated us as ‘Good’ or ‘Very good’. Again, we have had an internal review to make sure we use contractors more fully as our business continues to grow.

Over 85% of respondents stated that we are ‘Good’ or ‘Very good’ at providing full and correct access details and contact details with our purchase orders. This is sometimes a difficult issue to manage when full access details are not provided to us when we first take a development into management.

Here are just a few selections of quotes from the survey:

  • “We have found that working with yourselves is a good experience, with easy lines of communication and understanding of the works involved, which is vast improvement on other managing agents we work with.”
  • I work for many property management companies and I feel that Principle is one of the best to deal with. I always receive a prompt response and any queries are taken seriously.”
  • “If only other management companies we deal with run this smoothly.”
  • “A pleasure to deal with.”
  • “You are a very professional operation and we enjoy supporting you with our services.”
  • “Overall, I feel that Principle are an approachable and professional company, and it is a pleasure to deal with all members of senior management, and office staff.”

5/ Constant improvement. While we are pleased with the survey responses from our contractors, we quickly identified several “working on” area which we now have in hand.

Aiming to improve is an important principle in all areas of our business – and that includes the way we treat our suppliers and contractors.

Principle will continue to strive to have excellent contractor relationships because the end result is beneficial to customers in the many developments we manage.

And treating suppliers properly means we’ll never end up with any damaging ‘white van man’ experiences on any of the estates we manage.