How Much Did You Spend on Office Furniture?
OK. Maybe you aren't planning to spend as much as these people on office furniture, but it could be enough that it causes problems within your business. When making large purchases for your business it's important to come up with a good vetting process.
Let's face it. Things are very expensive these days. I don't see that changing anytime soon. It's more important than ever to have a good process for making the decisions on large purchases. Here are a few tips:
Set a threshold for what is considered a large purchase. Anything over $10k for example. Note: Don't put threshold levels in that stop the day-to-day operations of the business. This is meant for one-time purchases over a certain amount.
Form a team that presents to the final decision maker.
Build, and maintain, a list of large purchases that you plan to make. Many companies aren't proactive with their capital expenditure needs. They only buy when there's an emergency. This leads to down time, potential for injury, less productivity, bad image. Here are a few things for the list:
Describe the purchase and why it's important
List the cost
List the right time to do it
Put the bid out to 3 vendors
Keep in mind, surprises happen, so don't spend everything
Remember to try and keep enough cash in the bank to cover 1 quarter of expenses. This is a good buffer for when times are tough, or surprises arise. It allows you to make better decisions.
PS. That's a picture of the world's largest chair (for now). It's located in Anniston, Alabama and stands 33 feet tall. On hot days, it's a perfect place to park your car.