Whether your business is purchasing new computers or looking for a vendor to train employees, it's helpful to follow a step-by-step process that ensures you get what you need while also considering your budget and expectations for the product or service. Such a process gives you the opportunity to examine your company's specific needs in detail and select products and vendors that are most effective for your situation. By following a business purchasing process, you will not only complete your purchase but also examine the results so you know what may work better for future purchases.
TL;DR (Too Long; Didn't Read)
The 8 steps of the business purchasing process are:
- identifying the business need;
- determining a budget;
- selecting a purchasing team;
- defining specifications;
- searching for options;
- evaluating options;
- making the purchase; and
- re-evaluating the purchase.
Identify the Business Need
Purchasing is an important aspect of running a business, so it's imperative that businesses make decisions to buy products and services that will enhance their operations in some way. Before making a purchase decision, businesses must identify a true need of their company. For example, purchasing new software may improve inventory management, or adding a printer might increase productivity. Often times, employees present their employers with needs while at other times, employers have to recognize a need after reviewing work flow and business goals.
Determine a Budget
Whether it's small or large, a budget can help keep businesses from overspending and seemingly underspending on purchases they need to make for their operations. A budget provides the purchasing team with a guideline they can use as they research vendors and products, and weigh purchasing possibilities.
Select a Purchasing Team
Select individuals on your staff to research options for the purchase your company wants to make. It helps to use individuals who are on the front lines and involved with the item you plan to purchase. These individuals understand the processes behind the item being purchased and are likely most familiar with the features and benefits that can add value to your organization.
Work with the purchasing team to develop a clear picture of the specifications for the product or service your company is planning to buy. If you're purchasing a printer for a real estate office, the specifications might include a machine that prints in color, is under 24 inches in size, prints on glossy and photo paper, has 64 MB of memory and wireless connectivity, prints up to 17 pages per minute and works with Mac- or Windows-based operating systems. These details can help the purchasing team identify items that fulfill the company's needs immediately versus researching options that don't fit the overall needs.
Search for Options
Use the product specifications to search for viable options. Find vendors and suppliers who offer the product you're in search of. Take into account vendors you've worked with in the past, those who have sales or offer discounts to businesses like yours.
Evaluate Your Options
Narrow your search and identify the best options for your business. Work with the purchasing team to identify the pros and cons of each option. Consider costs, features, maintenance, delivery times, payment options, customer service and vendor reputation.
Make the Purchase
Determine how your company plans to pay for the purchase and identify the purchasing team member to sign off on the purchase. Contact the vendor who provides the product you want to buy and make your purchase.
Re-evaluate the Purchase
It's important to follow up on purchases to determine whether or not the purchase is working for your team. Get feedback on the purchase so that you know if changes need to be made to the specifications if the product or software must be updated in the future.