Acquiring a large customer or bulk order is the aim of any ambitious small business. Larger orders generate large income; it’s as straightforward as that. However, large orders can also be costly and, if unexpected, a small business may struggle to fulfil the order. Turning down business is never a desirable option, as it can destroy customer trust in the company. Applying for short term loans online can be one solution for small business owners in times of financial difficulty but there are other solutions available.
Aside from cost, the main problem that small businesses attempting to fulfil large orders face is that their suppliers may be unable to cope with demand. In order to provide their suppliers with the necessary funds upfront, a purchase order financing company will pay the suppliers on behalf of the small business. This may not necessarily be for the entire amount but it will cover a large proportion of the expense. This money is paid back, usually with additional fees, at the end of the deal. The benefit of this is that it’s easy to apply for the required amount, whereas bank loans may be more difficult to acquire. Purchase-order financing can also enable small businesses to compete with large organizations.
Find a Partner
For a small business that is looking to grow and fulfil larger orders, partnering can be an ideal solution. It might sound counterintuitive for a small business to partner with the very businesses which they are trying to compete against. However, a partnership can result in increased revenue and being able to offer customers a better, more complete package of services or products. A partnership will also give a small business a wider reach, enabling them to access a larger share of the market. Combined, these factors can provide small businesses with the resources and finances to fulfil large orders.
Raise or Lower Prices
Adjusting the prices of your other products accordingly after receiving a large order can help to cover the expenses. The prices of products constantly changes so it’s important to be aware of the latest market trends. Immediately increasing prices could be beneficial for a short-term increase in revenue but it may negatively impact the businesses sales figures. It can be better to increase prices regularly but in small increments, as customers rarely react to minor increases. Alternatively, lowering prices could create an influx of sales and help to increase revenue in a different way. Being tactical with pricing can allow small businesses to generate the income required to fulfil larger orders.
The approach taken by a small company will vary depending on the nature of the business. There are a number of different ways to approach covering the expenses of a large order. The most obvious solution is to increase sales by improving customer relationships, adjusting pricing according to the latest market trends and finding an appropriate business partner. A partnership needs to be mutually beneficial so this may not be the first step taken. For one off orders, purchase-order financing can be the ideal solution.