How to Select Reputable Vendors and Avoid Small Business Scammers

It’s not exactly the most comforting topic to ponder, but it’s a conversation that needs to be discussed: there are people in this world who don’t have any qualms about making a quick buck from an unsuspecting small business owner. Scammers and shysters can pop up anywhere, and they don’t always have their sights set on the elderly and infirm.

Disreputable vendors can do more than just walk away with your hard-earned cash. They can damage your business’s reputation as well as gain access to confidential information that could harm your clients and customers, too.

While it’s not my intention to lead anyone astray with fear mongering, I do strongly urge small business owners to use their common sense when selecting vendors. There are several things you can do to protect your business.

Read the Contracts

If your relationship with a particular vendor requires signing a contract, read it thoroughly. Be on the lookout for contracts that stipulate you can’t leave at anytime and for contracts that require you to pay additional fees if you ever want to leave. If you’re not familiar with the vendor or its people, never take their word for what’s in the contract. Take it back to the office for a thorough reading or have a legal professional look it over before you sign.

Screen Vendors

You can learn a lot from a few minutes of internet searching. Using the company name with terms like “scam” or “complaints” in a web search can give you some pretty solid information about the company you’re considering. A brief scan of complaints and reviews should be enough to tell you whether a couple of clients just had bad experiences or whether the company has systemic problems you should avoid.

Get Referrals

Using your networks to get recommendations is a great way to avoid scammers. If your business partners and colleagues make a recommendation, your chances of dealing with a company that’s on the up-and-up improve substantially. Remember, however, that even with a referral it’s important to read and understand contracts and continue with the screening process. Always err on the side of caution.

Ask for References

If you don’t have any referrals to work from, ask the vendor to provide you with a list of references. Then follow through and contact the references and ask specific questions about their experiences with the company. Prepare the questions ahead of time if your not good interviewing on the fly.

Go with Your Gut

If at any time you feel uncomfortable about a vendor, walk away. Never feel obligated to do business with a person or company that you don’t feel good about. The reputation of your own business is too important to overlook any misgivings you may have. We get that queasy feeling in our stomachs for a reason. Learn to respect it.

With a little common sense, it’s not so hard to avoid scam vendors. What tips or methods do you use to vet the businesses that supply your company?

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Emily Suess
Emily Suess is a full-time technical marketing writer in the software industry and a part-time freelance copywriter. To learn more about marketing your small business online, check out her copywriting blog, Say It With Me.

3 comments

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  1. One thing that I did with referrals was to ask them to provide a referral to someone who was unhappy with their services. If you ask for a referral, then you’re going to get the cherry-picked happiest one. However, asking for the unhappy referral gives you an opportunity to evaluate what happens if things don’t go as envisioned – are you treated with respect and does the vendor stick around to make sure things are made right? It’s not always an easy question to answer (there are, legitimately, some people who make sunshine and rainbows and unicorns EVERY time), so asking for it ensures you don’t get the stock answer.

  2. The first thing to do to avoid small business scammers is “YOU SHOULD NOT DO BUSINESS ONLINE WITH ANYONE” when they approach you just ignore them or unsubscribe. All the information that this online scammer provide are well fabricated and well organize, more then one have had bought into it “of course there are companies you can trust, and they don’t send you email offering their services”. In the other hand when a person come to your business you have to do your research to make sure everything is in the open. Read very careful the contracts, take a look to the background of the company, ask for referrals. What Jason have mentioned about asking for a referral of unhappy customer is a key factor and you must know why the customer was unhappy. If they say there is not unhappy customer they are already lying “There is not a perfect business or company”. Best of luck to everyone.

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