For
entrepreneurs, the challenges of purchasing for a business are an everyday
concern. In this week’s post, RCI 1st Vice President, Barry Bomboy of Bomboy’s Home Made
Candy, shares five purchasing habits that help his family’s business maintain or
increase the quality of their products while staying conscious of the bottom
line.
COOPERATIVE PURCHASING
As a member of RCI, we have been able to network with other great companies and
build relationships, which allows us to have greater purchasing options. In
some cases, we are able to combine our orders with other companies' orders to
purchase ingredients and supplies. This allows us to collectively meet larger
minimums and receive better pricing.
Cooperative
purchasing can add great value to your business, however, you may have to
adjust your buying patterns to get this type of cooperative buying to work. It
is important to figure out who has the best options for receiving larger
shipments and make sure you have the storage available for a larger purchase.
You may be at the mercy of someone else’s buying schedule, but when you join
forces you will find that your buying power can save a significant amount of
money, which goes right to your bottom line.
STAGGERED DELIVERIES
We
try to schedule our deliveries so that they are staggered at a pace that will
allow us to keep our everyday flow moving. We want to make sure we have raw
materials for manufacturing and also packaging materials for finished goods. We
also have to ensure that we have enough space to continue working and to store
inventory. We are able to schedule seasonal employees based upon the delivery
dates we have chosen to keep production at a maximum.
KEEPING RECORDS
We
keep records of all of our purchases and sales leading up to and during each
holiday season so we can plan for the following year. At the end of a season,
we ask ourselves if the timing worked and if we had enough or too much
inventory. We track not only what we sold, but also how much and when it sold.
We feel that we can never have enough notes to make the following year better.
ASK THE RIGHT QUESTIONS
Another
challenge is making larger purchases of equipment for manufacturing and
packaging. To prevent unnecessary spending, we, first, have to answer the
following questions:
- Do we need it?
- Will it improve efficiency?
- Is there room for it?
- Do we need to change electric hookups or plumbing?
By
taking steps to address these questions, we are able to avoid making decisions
that could be counterproductive, if for instance, the equipment is of no use
because we don't have room for it or we don't have the proper electrical
hookups.
TRACKING WEATHER
Lastly,
there is one other major item that we track from year to year, because we are
located in the Mid-Atlantic region of the country: weather. We know that our
sales could have been affected by that major snowstorm that hit three days
before Valentine’s Day or a late 85-degree Easter. Our customer’s buying habits
often reflect that our business is driven by weather.
Look
for ways to incorporate one or more of these proactive approaches to help you
form smart purchasing habits that will propel the success of your business.
Now is the time to
start planning for the holidays! Explore
what’s new in the confectionery industry and connect with fellow candy makers,
chocolatiers and suppliers at RCI’s Annual Convention & Industry Expo on
June 3-7,2019 at the Connecticut Convention Center in Hartford, CT. Register by March 29 to get the best rates!
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