Sourcing goods that your business sells, or uses in the manufacture of goods that you sell, can be a constant headache if you don’t stay on top of things. Not only must you find cost-effective suppliers, but you often need to manage those relationships and ensure you have a reliable flow of goods to keep your business ticking over.
“This sounds simple and easy to do, yet small businesses struggle with this aspect of their businesses,” says JJ Oosthuysen of Go-Hi Consulting, which specialises in helping small business manage their growth. “By their very nature, small businesses are informal, do not have complicated processes, are less standardised and the owner manager often works directly with suppliers themselves. Continue reading
Getting the best price from your suppliers is a predicament for every entrepreneur. If you’re unable to get a competitive price, either the price to your customers will be unattractive, or your profit margin suffers.
Erich Viedge, a business and executive leadership coach, says that mastering negotiation is a sure-fire way to help you get the prices that you need. He says that following four tips can help take your procurement to the next level. Continue reading
As a small business owner it is easy to think you don’t need to follow the rules that big corporations apply. In certain respects this is true, but then there is probably a good reason bigger organisations have these rules.
Take procurement, for example. Why do large companies have whole teams dedicated to their buying department? For good reason: unless you monitor and mange your costs, your profitability will suffer. Continue reading
Buying in bulk is a great way to gain leverage that allows you to negotiate better prices from your suppliers. Accountants and economists like to talk about ‘economies of scale’ – for a small business owner this is simply ‘good business sense’.
Gaining a cost advantage by buying in bulk also sounds a lot easier than it is. A large order, even at a great price, means that you’re going to have to sacrifice cash flow to pay for that order. And as all small business owners know: cash flow is king. So unless you have some certainty that you’ll be able to sell that stock quickly, your good buy could well turn out to be a bad buy. Continue reading