Who says strategic sourcing approaches are limited to the Fortune 500 hundred and the middle market? Small businesses are increasingly getting more negotiation savvy. A recent Wall Street Journal article (subscription and registration required) shows how "small companies are finding that almost everything is renegotiable these days. The economic downturn is prompting business owners -- by necessity or by opportunity -- to re-examine contracts with suppliers, vendors or landlords and come up with creative deals. And in many cases, they are saving a substantial sum of money."
What does the article recommend for cost saving tactics? For one, pay your suppliers early, and then go back to them and negotiate discounts of 1-5% for payment within 10 days of receipt of a product or service delivery. Also, look for symbiotic relationships with your suppliers where both can benefit from expanding a commitment. When it comes to negotiating real estate leases, we all know this is the time to negotiate, the article suggests. But back up the negotiation by showing a strong balance sheet, access to credit and a good book of business to get the best possible deal. To this list, I'd also add the importance of price benchmarking and good old-fashioned sourcing efforts to make sure you're not only getting a good deal, but keeping it overtime as well. Whether or not you use a tool like Ketera's sub fifty-dollar per month sourcing app is up to you.
- Jason Busch