Your Home Business Purchasing

In the previous five articles, I've mentioned some of the key elements of managing your online business when you are working at home. Working at home in your own business does not mean there are no management responsibilities, as you are now the manager of all the different "departments" in the business. It is your business now, so you get all the benefits of good management, and all the consequences of bad management. The buck stops with you, though if things go wrong, you may be tempted to blame others. But when you are the CEO, the responsibility for the well being of the business is yours. Apart from everything else, you are also the CEO.

There are three "departmental" elements of management that I have not covered yet: purchasing, and, if appropriate, research and development, and production. I will not delve into production or research and development, as I suspect few of you will have a need for these. However, working in any home based business will certainly have a purchasing input. Whatever you are doing, you will spend money. The better you manage that spending, the better your profit and loss results will be, and that is true whether you're working in an office or at home. A large business will probably have a professional purchasing manager, watched closely by the finance director and CEO. If you are working alone at home, you are that purchasing manager. However, the finance director and CEO parts of you need to watch out for what's going on. You need to give yourself a tough time in justifying your expenditure.

Why Do You Need to Manage Your Purchasing?

This is really a statement of the obvious. To be profitable, you need your revenue to be above your expenditure. Your expenditure is made up of purchases, whether for internet access, power, ebooks, advertising, or printer cartridges. The more efficiently you can manage that expenditure, the better for your bottom line.

Spending money is easy. It is one of the easiest things in the world to do. Spending it well and in a business like fashion is very different, and not anywhere near so easy.

Where and how can you go wrong with your purchasing if it is not managed properly? Here are just a few examples: