How to Tackle Procurement on a Small Business Budget

Procuring new assets or equipment is something every business needs to do sometimes. For small businesses, this can be a challenging process where you need to find a balance between your business needs and your available budget. Here’s what you need to know in order to ensure that you are able to procure the right equipment at the right time and for the right price.

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The Rule of Three

Whenever you are sourcing supplies for a business, regardless of size, the rule of three will serve you well. For small businesses who need to be more selective about how they spend whatever money they have available, the rule of three is an effective tool for ensuring that you are spending your money wisely.

Simply put, the rule of three states that you should always get quotes from at least three suppliers for any procurements. If there is a supplier who offers everything you want but at a higher price than you want to pay, a quote for a lower price from a competing supplier might convince them to match the offer.

Rule Setting is Good

It’s easy for a small business owner to deviate from any budget that they set themselves. Unless you have someone else forcing you to abide by a certain budget or set of policies, there will always be a temptation to do what’s easiest, rather than what you planned.

Setting yourself boundaries, and making sure that you are able to stick to them, is important in developing your self-discipline. It is also something you need to do when you are in charge of procurement. It might be easier in some ways to take a slightly more expensive route to your goal, but don’t let that make you go over budget.

Hone Your Negotiating Skills

Negotiation is an important skill to have in the world of business. However, many small business owners have never had any experience with serious negotiations, meaning that when they enter into their first real discussions with other businesses, they aren’t sure how to proceed.

If you are new to negotiating then it is a good idea to do a bit of studying beforehand. If you go into negotiations unprepared, your opponent will be able to tell.

Bulk Up Where Appropriate

If you find yourself needing to buy a single unit or a single item, you will be best served by looking online in most cases. For example, if you’re looking to buy a single safety harness for high elevation work, then it makes sense to look at a supplier like Harness Land who, you won’t be surprised to know, sell harnesses.

In order to make the kind of savings that most people are looking for when they are considering procuring equipment for a business, you need to be buying your items in bulk. Of course, if you only need a small number of units then buying in bulk might make the per-unit price exceptional but will still cost too much to be feasible.

Where it makes sense to order in bulk, you should do so. However, don’t fall into the trap of spending more than you need to just to take advantage of a deal.

Once you have been around the block a few times, equipment procurement is easy. It’s those first few runs that often seem overwhelming, once you’ve found your feet it’s much easier.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.