Toolkit on how to Start and Improve your Business - Information Seeking

Supply Analysis

 

 

 

   

 

Supply refers to the different types of input you need from others for production.

Production-oriented business owners need to buy:

  • Equipment/tools;

  • Inputs such as raw material.

Buying equipment/tools

Equipment is all the machinery, tools, workshop fittings and office furniture that your business needs. Old equipment needs to be replaced. You should check regularly to see how well your equipment works - if it still produces as much as it used to and if it still produces the quality you need.

 

You may need to buy new equipment when it:

  • becomes difficult to operate;

  • does inferior work;

  • breaks down often;

  • becomes old.

        Important questions to ask before buying equipment/tools

  • What kind of equipment do I need?

  • How much will the equipment cost?

  • Can my business afford to buy the equipment?

  • Can I buy the equipment second hand?

  • Will the increase in profit after I buy the equipment be high enough to pay for the cost of the equipment?

  • How much more work does my business get now and in the future?

  • How big must the equipment be to do the work I expect (capacity)?

  • May be you do not need to buy equipment of your own. In that case find out if you can:

    •  borrow or rent equipment only when you need it;

    •  outsource to another business that has the equipment to do the work for you.

  • Is there another new kind of equipment better than existing ones?

  • Which equipment is the cheapest to run and easiest to operate?

  • Do I need special training to use the equipment? Can I get it? Is the fee affordable?

  • How long will the equipment last?

  • Does the supplier give a written guarantee?

  • Will the supplier install the equipment and service it?

  • Can I have it serviced locally?

  • Are the spare parts available locally? Is the cost affordable?

 

Buying raw materials

Raw materials are all the materials and parts that go into the products you make.
Example: Wood and varnish for making furniture.

 

Buying office and workshop furniture for your business

You have to know what type of furniture you need before the start of the business.
Some of them include:

  • Shelves, tables,  seating;

  • Computer facilities, printers, photocopy machine;

  • Telephone, fax, Internet connection.
     

              Conditions of raw material supply

  • Try to use materials that are always available when you need them

  • Buy materials from reliable suppliers and make sure the quality is good

  • Before you buy raw materials, find out:

    • what different materials you need;

    • what quality your customers need;

    • how responsible is the supplier for the quality of goods or materials;

    • how much raw material you need;

    • how often you need the raw materials;

    • how long it takes to secure raw material from the supplier;

    • affordability of the purchase price.

  • Does the supplier grant discounts for bulk purchasing?

  • What is the smallest amount that can be purchased?

  • Is it possible to make credit purchases? How much can be obtained?

  • Terms of delivery: Will the supplier deliver to your business? Do you pay for transport or is the delivery free?

  • Does the supplier accept returned goods or materials?

 

Get information about different suppliers and compare them based
on the following offers:

  • Lowest price;

  • Best credit terms;

  • Best terms of delivery;

  • Best quality of raw materials.

 

Institutions involved

  • Contact Chamber of Commerce and “Yellow Pages” for list of raw materials, office and workshop equipment suppliers;

  • Make visits to the most important commercial centres in town (including importers, if necessary);

  • Contact wholesalers and retailers of supplies.

 

                       Steps to follow when you buy

  • Find out what your business needs;

  • Buy only equipment which is really necessary for your business;

  • Get information about different suppliers;

  • Contact and choose the best suppliers for your business;

  • Place the order;

  • Check the goods immediately;

  • Check the invoice;

  • Pay.

 

[top]

 

Market   I   Supply  I   Infrastructure  I   Business management  I  Finance  I 

Business registration  I  Taxes/Customs  I  Tenders  I   Summary

 

 

Business Development Services (BDS) Forum
www.bds-forum.net edited by Dieter Gagel, freelance consultant, providing information on BDS strategies, networking and practical BDS case studies as well as business information on marketing, business planning, bookkeeping and cost calculation, import-export, trade fairs and access to finance.

New BDS Portal in Senegal www.senegal-entreprises.net .
One of the biggest national BDS portals world wide!

Value Chain Development in Ethiopia www.business-ethiopia.com