Running a business sadly isn’t just a case of investing the upfront costs to get going and then sitting back and watching the profits tick up. As anyone who’s set up a business of their own knows, it takes a constant process of outgoings, chosen judiciously to get the best returns on an ongoing basis.
The more that your company grows, the more that you’ll want to keep spending in order to invest in opening up even bigger opportunities – whether that be spending more on staff, raw materials, marketing, or otherwise. This is when you’ll want to be fully aware of your business’s purchasing power.
Purchasing power represents how much your business can spend at any one time. The higher the purchasing power, the more options that you have to get exactly what you need at the best rate – so what can you do to give yourself more of those options?
Explore a Loan
Given that your purchasing power comes down to how much cash you have at your disposal with which to go out and get the things that your business needs, the most straightforward avenue to explore is accessing more money.
If you have a clear plan for how you would use an injection of cash to get better returns for your company, then exploring the possibility of a business loan could be the perfect solution. Knowing that your outlay will set you up for better profits then makes it easy to repay the loan comfortably.
Join a purchasing organization
A small business will find its purchasing power lower than that of a giant megacorporation as it is in less of a position to splash the cash with suppliers in order to arrange bigger or customized deals. One way in which this can be addressed, though, is by joining a group purchasing organization (GPO).
GPOs are formed by several smaller businesses who come together to approach suppliers as one larger unit, combining their purchasing power to obtain deals which would otherwise not be available to any of them individually. The bigger outlay from what is effectively a single entity makes suppliers more willing to accommodate any special requests that might be required by your business, while all the companies taking part get to feel the benefits.
Examine your existing arrangements
It’s possible to look inward as well as outward when identifying avenues that could put more money into your hands. Consider taking a closer look at what your business is spending on overhead costs like office space and utilities bills, especially if it’s been some time since those arrangements were made. With the rise of hybrid and remote working, are you spending more on your office space than you need to do?
Meanwhile, a comparison of your current deals on utilities such as energy with alternatives on the market might unearth opportunities to switch for a better rate – or enough evidence to negotiate a better deal with your existing supplier. You might be surprised at how much of a difference this could make to free up extra funds.
Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.