It’s likely that you’ll need to make some large purchases to keep your business running smoothly, and the deals that you agree on these can be just as crucial for your cash flow as your sales. Here are six top tips for making sure your big business purchases are as cost-effective as possible.
Top 6 Tips on How to Drive a Hard Bargain
- Don’t be afraid to negotiate on price, whatever you are buying. People are often embarrassed to haggle, except in certain sectors, and it can be easier to accept a fixed price for fear of seeming cheap or cash-strapped. But, for business purchases in particular, negotiating is a useful skill and vendors will often expect a bit of banter about prices before you shake hands on a deal.
- Learn the art of negotiation. If your day-to-day business life is very sales orientated, you might not need help here, but sometimes even the best salespeople forget how to negotiate when they’re on the other side of the dealmaking. If you’re haggling about a big purchase you need to keep your cool and don’t agree to the first figure that’s put forward. Don’t be afraid of silence in negotiations – sometimes it’s too easy to jump in and up your offer just because the other party hasn’t immediately knocked theirs down, and before you know it you are negotiating against yourself. It’s also important to do your homework first – those that get the best deal know the true worth of the item that they’re bargaining for even if that’s not the price they’re prepared to pay.
- Don’t forget that sometimes the best deal is not just about the numbers. From software licenses, if you’re buying computer equipment, to insurance deals with vehicles for your business, there are a multitude of incentives that could have significant value in a deal. It’s worth working out the nuts and bolts of any package that you’re offered, including things like warranty or the frequency of upgrades, before you decide whether it’s competitive or not.
- Getting a good deal on purchases can really improve your cash flow, but don’t spend so much time trying to save pennies that you lose pounds in terms of your own time. If possible, delegate the shopping around to someone else, but if that’s not possible use online forums or, better still, personal recommendations as a shortcut to the best deal. Make sure that you offset the time that you spend searching, against the savings that you can make. Also, don’t forget that if you’re buying something that dates quickly, such as computer equipment or mobile phones, and you’re considering an older version for a lower price, you need to consider how soon you will need a newer version and then offset the shorter lifespan against the cost.
- Make the most of any tax breaks that are available when you’re buying a large item – such as allocating start-up purchases as capital allowances or claiming tax relief on certain equipment for employees. If you are in any doubt about how to ensure that major business expenses are tax efficient, check with your accountant to ensure you are getting the maximum benefit from your spending.
- Don’t forget that you don’t always have to buy large assets outright to reap the benefits of using them. Leasing has many advantages – there are no large capital outlays, you’re not usually responsible for repairing the item, and it’ll be upgraded to a more recent model after a few years, at no extra cost. If you need vehicles, specialist equipment or even cutting-edge computer technology, leasing is often the most viable option for your short to medium term cashflow.
At Funding Guru, we know that making large capital purchases can put enormous pressure on your cash flow, which is why negotiating and driving a hard bargain is so important for your business. There are usually plenty of better ways to purchase large assets instead of using your own resources – and we like to think we know them all!
If you need asset finance, equipment leasing, a cash advance or even a short-term bridge to see you through a cashflow hurdle then we are here to help.
