9. Decide where to get the equipment, tools and materials for your business
For start-up businesses the effective purchasing of equipment, tools and materials is a fast and simple way to boost profits and improve efficiency and quality.
Suppliers can be found through:
Existing suppliers or competitors’ suppliers.
Trade journals, trade associations and Chambers of Commerce.
Directories — in the library or on the Internet, such as www.yell.com.
The Used Equipment Network (www.buyused.com) has used machinery, from aircraft to X-ray scanners.
Suggestions from friends and employees.
Make up a shortlist and write to each supplier, explaining your exact requirements. Ask suppliers to send you product details, price lists and other relevant information. You can often obtain better terms by letting suppliers know that they are competing for your order.
Important points when making a purchase:
Buy the product that offers the benefits you want.
Never buy on price alone.
Focus your price-cutting efforts on those items you spend most money on.
Focus your quality-boosting efforts on those items which most affect the quality of your own product.
Keep accurate records of all purchases.
Do not ‘squeeze’ a supplier if you plan to buy regularly from that source.
Look for opportunities to pay using your product instead of cash. (‘I’ll give you some furniture, if you do my accounts.’)
Get quotes, including details like discounts and payment terms, to use in negotiations. Ask how often prices will rise, what influences will cause them to rise, and how you will be notified.
Once you have narrowed the choice down to two or three suppliers, negotiate prices, discounts and levels of service. For a healthy long-term relationship, do not negotiate too hard a price at the expense of quality.
Agree on payment terms. Payments in advance should generally be avoided, especially if you are unsure about the supplier’s creditworthiness. It is useful to ask for a discount for early payment.
Alternatives to Buying
Before buying any equipment, consider the various possibilities. Different choices will alter the amount of capital you need to put into your business and affect your costs. Take the example of a furniture maker, starting in business and needing a supply of round, turned table legs. He cannot afford to tie up his finances in capital equipment so he considers several alternatives to buying a new lathe: (Click the options to reveal the associated considerations)
Be careful when buying equipment as part of the purchase of premises, particularly when taking over leased equipment. Check the exact terms of the lease and make sure all the equipment is transferred into your name.
Here are some sources to help you research equipment suppliers:
For the Office - Telecomms
Independent advice on telecoms and the internet for businesses is available at www.telecomsadvice.org.uk
It is worth mentioning that there are a number 'online telecoms companies' that offer call-forwarding, auto-answering and online-fax services free of charge.
A YAC Number (www.yac.com) for example, is a free service that gives you 'One Number' for all your incoming phone calls, faxes and voicemail. This is useful if you are running a small business from home and wish to separate your work from leisure.
If you can't justify buying a fax machine.
If you are waiting to move into offices - and need some temporary office telecom
Buying a Computer
These days, a low-spec PC will be more than capable of running all the general business-admin tasks required for your business.
Large retailers often offer some great 'PC Packages' which are extremely competitive.
Buying from a local store also provides some assurance that when problems occur as it is not necessary to travel too far to complain on a face-to-face basis.
On the other hand IT providers such as Dell; www.dell.com offer extremely competitive prices for computer systems.
It is possible to save money on the cost of the operating system - (it's cheaper if you buy it with the PC) - and may get other useful equipment (like a printer or scanner) included in the deal.
If you already have some experience, own some working PC parts or can't find a package to suit, you may be able to build a better PC Package at less cost: 1. It is important to research the latest offerings on the PC market.
2. Buy all the components online - at www.dabs.com or www.ebuyer.com
3. Build it yourself - adding specific business related software if required.
It is important to remember that along with the hardware, you will need to pay for an operating system (e.g software like Microsoft Windows) and some other software, like Microsoft Office, which are essential for many businesses. It is important to remember to compare like-with-like if you are comparing prices of a 'self-built PC' to a retailers 'PC Package Deal'.
Office Furniture
The following websites are useful in sourcing office furniture, providing a range of choice suitable for various business needs and different office environments: www.BoxedOffice.co.uk; and www.viking.com.
General Equipment
The internet is an easily accessibly and cost-effective way of sourcing a variety of equipment. Browse some items on Amazon to get a rough guide on prices: www.amazon.co.uk or use a comparative pricing website such as: www.kelkoo.co.uk. Ebay: www.ebay.co.uk is now considered a very effective method of purchasing equipment online, however, for large and expensive items it is important to contact the seller to ensure service records are up-to-date.
