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Making Smart Purchase Decisions on a Tight Budget: Small Business Advice
Making Smart Purchase Decisions on a Tight Budget: Small Business Advice
As a small business, it is easy to second guess purchase decisions. When free cash flow is tight, there is never enough time, and the industry is competitive it is important to know how to find the right company to buy from. So we thought we’d make it quick and easy for you. Here are some important things to look at before even contacting the company you are looking to do business with.
Ask yourself- What will your boss think? We all want our boss to see us as the hero: The person they can count on to save the day and make ‘the big finds’ that will save the company time and money. Starting with this question is always a sure way to put the purchase in perspective and to make sure you’ve found the right fit for your company’s needs. Asking this question can help you assess whether or not this is really the best choice, and it can even encourage you to find a better one.
Compare. This seems obvious, but many companies don’t fully commit since it can be time consuming. However, we believe it is worth it in the end because it will save you time and money over the long-term. Comparing the range of companies that offer a service might be enough, and with the internet making it easier to find information, it can be tempting to stop your search there.
However, digging deeper into the company you are looking to purchase from by asking others can save you from hidden fees or headaches that result from poor customer service. This doesn’t mean you have to call their current customers – that may be taking things too far, but make sure to seek out reviews, Google the company to scan search results, or test the company out for a while before signing a long term contract. Even if prices are low, dealing with a company that has poor customer service can be time consuming (not to mention painful) – and time is money.
Is the price right? This seems like an obvious one – and it is. However, this is a two part question that should always be followed by: Is the value right? It’s tempting to jump on the lowest price, but make sure you also look at the quality, the company’s reputation, and the benefits of purchasing this product from this company.
Seek Quality & Value. This is an important factor because although something may seem like a low price per purchase, it could be costing you over the long run. For example, when it comes to wire cutting and stripping blades, buying blades that won’t last as long means you go through more blades and end up paying more over the long-term. To make sure you are getting the best quality for the best price, test and compare products over time from different companies to find the best alternative with the highest value at the lowest cost. Although this may initially take some time, the dollar savings in the long run will be well worth the effort.
Seek Reputation. Also, don’t forget to choose a company that has a good reputation, or at least not a bad one. George Washington said it best, “Associate with men of good quality if you esteem your own reputation; for it is better to be alone than in bad company.” There are some bad egg companies out there, be cautious and stay away because your customers just might be watching.
Seek Benefits. Finally, don’t just compare the products; compare the benefits of working with each company. In our industry, we found that working with a small business can be less stressful. There’s less room for error along the supply chain and customer service is always high since every customer counts. It is also easier to build relationships when the supplier to customer ratio is smaller.
Overall, for the best long-term cost and time savings, do your homework when comparing (yes, all of it), conduct testing to find the best value, and seek more than just product benefits but also company benefits when choosing the best supplier for your company.
