When you manage a project or team, eventually you will be required to purchase products or services from an outside company. Firms have protocols that detail specific dollar amounts employees can authorize on behalf of the company. If a purchase you are looking to make is higher than the specified threshold, a supervisor is required to authorize the purchase. In these instances, the purchase proposal is used to justify the need for a purchase, particularly when the expense will be large or affects a significant part of the business.
Create a comparison chart. The chart should list each provider of the good or service you are seeking and contain relevant attributes concerning the offering. For instance, if you're seeking a vendor to provide team-building activities for staff, categories will include: Company Name, Location, Activity Options, Options by Price, Included Staff, Past Clients and Referrals/Reference. Include as many "at a glance" attributes as possible. This will make the data easy to review.
Do your research. Compile a list of three to five vendors that supply the good or service you are looking for. Including multiple vendors in your proposal indicates due diligence and helps your manager quickly understand your reasoning. Obtain a written quote from each vendor and populate the comparison chart with their data. Plan accordingly, as some vendors require lead time to supply quotes. Get a commitment from your vendor contact as to when you'll receive the written quote. Finally, ask the vendor for references from firms they have done business with that are similar to yours.
Call vendor references. All other attributes, such as price and service, may be considered equal but not all vendors will be a good fit for your firm. A vendor may have the right product but can't deliver it on time reliably. Service vendors may not have experience with your type of firm but do very well with other kinds. References will help you safeguard against these kind of issues and strengthen the validity of your proposal.
Make a decision. Compare the vendors based on the attributes you've defined, references and written quotes. Share your findings with a colleague whose opinion you value and ask for her input. Remain objective and choose the vendor with the strongest value to the company.
Create a memo. Address the letter to the decision-maker for the purchase. Write a brief statement of your intent to purchase and clearly state why the purchase is necessary and what benefits it will have to the firm. If you can calculate a return on investment, be sure to include those details in the memo. Also include the research you conducted, rationale for your decision and the associated short- and long-term costs of the purchase.
Deliver the memo to your supervisor. Include the vendor proposals and comparison chart as attachments. Schedule a meeting with your supervisor to discuss the purchase in full detail. Try to anticipate questions your supervisor will have and come to the scheduled meeting with strong, confident answers.
Separate ongoing costs and setup costs on your comparison chart.
- "Small Business Financial Management Kit For Dummies", Tage C. Tracy CPA and John A. Tracy CPA, 2007
- excited business deal image by Leticia Wilson from Fotolia.com