Vetting vendors: An 8-step guide for event planners and venue operators
Vetting product and service suppliers is not a new concept. In fact, according to ADWEEK, over 80% of shoppers conduct research prior to a purchase—for personal consumption and use.
Unfortunately, in the corporate world, it is a 180-degree shift—maybe it has something to do with spending other people’s money?
Global Risk Management Solutions, a leading compliance management firm, estimates that less than 20 percent of companies do any type of screening of their vendors, suppliers, and subcontractors. This gap in due diligence is a significant area of risk for any industry or organization—especially the events industry.
By failing to examine vendor’s capabilities, insurance policies, SOPs, permits and more, event planners and venue operators are exposing themselves to numerous liabilities.
Vendor/third-party vetting and oversight requirements are on the rise due to broken promises and disastrous results—oftentimes leaving the event planner or venue operator “holding the bag” —a haute couture bag. It doesn’t have to be this way!
Selecting product and service suppliers can seem like a daunting task, but it doesn’t have to be—it can be done with ease with a little pre-planning.
How well do you know your vendors with whom you conduct business? The truth is, probably not very well! Most organizations are not fully aware of a vendor’s abilities and/or shortcomings until it’s too late. Let’s change that.
It is understood that most events, and therefore planners, are pressed for time and money when identifying and selecting vendors. There is no benefit in the long run to fast-tracking this process. A well-established and methodical process will save you time and money in the end—as well as protect the reputation of the business.
Brian Avery, of Event Safety Services, has developed key concepts your company should address when evaluating vendors. Consider developing a checklist based on these ideas for your organization. Let’s get to know your supplier…
- Reach out to more than one vendor… and compare answers—it might surprise you. If you notice discrepancies… do more research. Also, determine if the vendor subs out work to other vendors. If so, make sure you use this process to vet them as well.
- Have your vendors provide a list of references (at least 3)? Word of mouth can be a very powerful tool… but it is only a place to start. There are many examples of suppliers that could paint a wall but could not pull a permit for work (think unlicensed contractors). Dig deeper… Check online references as well: Better Business Bureau (BBB), Google, Facebook, etc.
- Are they financially stable? Request to see financial statements—make sure the company can fund the job you have requested. The more expensive the job is, the deeper you dig to be ensure they can complete it.
- Insurance… hedging your bet! Being provided a COI, named on the policy and setting limits is just the beginning. Insurance can get complicated… consult an insurance agent/broker or attorney that knows the event industry—be honest about what you are doing. Sneaky underwriters and spotty coverage is leaving many event planners and venue operators exposed. Claims based policies and policy exemptions often provide service providers with lower rates—but at what cost to you—the planner/operator. Read each vendors policy and ask questions… based on solid research/knowledge.
- You might need a license/permit for that. You might be surprised by what is regulated. A great place to start… state department of business and professional regulation. Each state maintains a list of regulated industries (everything from amusement rides to talent agencies). Ask each vendor if they are regulated by state or federal (separate database) requirements. By speaking to multiple vendors, you might get multiple answers—red flag.
- Is it written down? Verbal policies and procedures don’t hold much water. Uniformity, based on exacting regulations, standards, etc. make for good policies and procedures… if they are written down and followed. Everything from weather related matters to food service handling should be addressed with plans. The goal is to compare policies and procedures and ensure compliance is obtained by all parties involved. If a vendor does not have written policies and procedures based on manufacturer materials, regulations, standards and practices… you should consider finding someone else. Handing out waivers and stating it’s not my problem “won’t hold water.”
- Does training come with that? Determine if the staff provided by the vendor is trained per the policies and procedures provided. Ask to see training logs and manuals… you might even ask to speak to a staff member—you can learn a great deal from them. If staff are not properly trained… move on!
- In case of emergency! Preparedness is key to timely and efficient response. Make sure your vendors have a set plan addressing guest injuries and even natural disasters (size and scope of event is relevant). Make sure plans are shared on both sides to provide consistent and timely care. Once again—they must be written down.
A comparative analysis of your findings should be conducted to determine the most suitable vendor for the job. There are instances when it benefits you to simply walk away. When in doubt—get out! By the way, this is a two-way street.
As event planners and venue operators, we have an obligation to ensure the safety of our patrons—by vetting your vendors, you are taking a huge step in the right direction in doing so.
Let’s set the example… the event industry should take the lead on this and show other industries how it can be done.