When starting a business, you will need to decide whether you are selling products or providing a service. If you are selling products, you may need to find a supplier, decide on the type of stock you require, map out your ordering process and determine how you will store your raw materials and finished products.
Read our Before purchasing inventory for things to consider when setting up your stock management and inventory systems.
Finding a supplier
Finding the right supplier is a common hurdle for start-ups. The success of your business often relies on the quality of the suppliers you choose, so doing it right can help save you time and money in the future.
The Finding and choosing suppliers checklist from Business Victoria can help you understand what to look for in a supplier. If you're already running a business, you can use it to improve your existing supplier procedures.
The online checklist gives tips on:
- what to check for when choosing a quality supplier
- making a shortlist of preferred suppliers
- setting payment and delivery terms
- how to maintain a good relationship with your supplier
- questions to ask when ordering stock.
Ways to save when negotiating with suppliers
If you're a small business, you may not have the bargaining power of other businesses. However, there are still ways you can try to save when negotiating with suppliers:
- Make sure your suppliers are legitimate – the ASIC Business Checks app is a tool for you to reduce risk when dealing with other businesses. The app will help you ask the right questions and check whether the information you are being provided by the business is legitimate.
- Shop around for the best deal – businesses are also consumers. Make sure you shop around to find the best deal you can get, and don’t be afraid to negotiate.
- See if there are any business deals – some companies will have special prices if you are buying as a business with an ABN. Check to see what deals are out there.
- Plan your subscriptions – while it may seem like a better deal to sign up to long contracts, getting shorter subscription periods may be more beneficial for your business cash flow, especially if you’re just starting out.
It is also a good idea to check out if there are any services available that may be able to fulfil your business needs without you having to purchase all the equipment yourself. For example, paying for the use of a cloud service may be more affordable for your business than building your own ICT infrastructure.
I am an overseas business - where can I find an Australian supplier?
You can search for Australian companies, their products and services on the Austrade Australian Suppliers Directory.
Contact Austrade directly if you are unable to identify the company you require.
Contact the Industry Capability Network who may be able to assist.
What to do...
- Visit the Finding and choosing suppliers checklist on the Business Victoria website to select the right supplier for your business.
- Read our Managing inventory topic for information on types of inventory, storing inventory, how to manage inventory and calculating inventory turnover.
- Read Payments and invoicing for more on setting payment terms, invoicing and choosing payment methods.
- If your activity is considered a hobby rather than a business, you may need to meet certain requirements to supply and transact with a business. Read Statement by a supplier not quoting an ABN on the Australian Taxation Office (ATO) website.
- Download more planning tools and templates from our Templates and downloads page.