Worried some of your suppliers might leave you holding the bag? You’re not alone. Fortunately, there are strategies that can help protect you and make sure you can keep your company and your customers happy.

Experts recommend a three-step plan:

1. Comb through your list of suppliers and identify the most-critical ones. In many cases, this is likely to be “sole source” suppliers for you.

How much stock do you have?

How long could you exist the stock you have on hand?

Determine how much time and money it would take you to find a new supplier that’ll meet your needs.  Are back-ups available?

Start putting together contingency plans now, before the need becomes extremely urgent.

2. How financially stable are your suppliers? Are they going to be able to survive if the going gets tough? There are factors you can’t control — like other business that don’t pay their bills — that can drive your suppliers out of business. For publicly-held suppliers, financial information is available on-line. For private companies, you’ll have to rely on “intelligence” — are deliveries running later? Short quantities with ”ship you more later” promises? Suggestions to shorten payment terms?

3. Finally, there’s a strategic move you can make now that could pay big dividends down the road.

If there are critical suppliers (or even one) that you know you’ll have difficulty replacing, propose working with that supplier in a mutually beneficial arrangement.

For example, you could buy “ahead” — more than you usually do. This can give a supplier desperately needed cash, and might be enough to tide them over.

Some experts recommend you could even consider investing in the supplier, or buying out the supplier. That might be a bit extreme, but it certainly will keep the pipeline open.

Tags: payment, source, stock, supplier