Procurement Best Practices for Small Budgets

As a business owner, you wear many hats. You’re the head of sales, chief accountant, human resources director, marketing manager. The list goes on and on. That’s why it can be so difficult to focus on any one business need. And one place where that focus often slips is purchasing.

MAKE PROCUREMENT A PRIORITY

It’s simple. You’re stretched in too many directions. And you simply don’t have time to implement a fully vetted procurement process every time your printer breaks down. The following tips can help you save money, even on the smallest of budgets.

1.Always get a few quotes before making a purchase decision.

For items like office supplies and equipment, you can do this pretty quickly. Search online to compare features and prices.

Doing so will give you a good idea of the average or range of prices you should expect to pay for the particular good or service you need to buy. And that evaluation will help you feel secure in your decision after the fact.

2.Don’t be afraid to negotiate.

It’s easier to ask for concessions if you change your frame of mind about negotiating from hard-hitting price haggler to business partner trying to bring mutual benefit to you and your supplier.

You and your supplier both have needs, and it’s important that they know what yours are. If you don’t ask, you won’t get it. You’ll end up paying more or getting less than you wanted. And ultimately, you will regret it. So just make the ask.

3.Work to develop relationships with your best suppliers.

Going back to the point above, if your supplier is worth doing business with, they want you to be happy and they should be willing to invest to develop a long-term relationship with you.

It costs much less to maintain good relationships than to have to continually develop new ones. When you can, throw a break to your suppliers. Send them referrals or give them good reviews on industry sites. Show them that you are as invested in the relationship as they are. Chances are, they’ll help you out when you need it too.

4.Look for economies of scale and cost-sharing opportunities.

“Seek out ways to come together with likeminded companies to help you both save money.”

Whether you share building space or business philosophies with another company, seek out ways to come together to save money.

Buy in bulk and split the cost with a closely located business on things like printer paper and paper supplies. Need a certain raw material that would cost less if you bought more?

Find out what other businesses or industries need it too, and purchase it in bulk together to drive down cost.

5.Safeguard your cashflow with a few office rules.

Set parameters for office expenses so your employees understand what they can spend money on and where they can they should shop.

Purchases over $100 might require your approval. You can stipulate where certain purchases are made – like a specific website to purchase stock photography that you’ve already negotiated a discount or agreed to acceptable payment terms.

Establishing a set of clear rules will make it easier for your employees to make the right decisions while ensuring you’re not overspending.

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Procurement Best Practices for Small Budgets

Purchasing is often an afterthought, but these procurement best practices can help you save money and make better purchasing decisions for your business.

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