12 Jan 4 Questions to Ask Before Making a Major Purchase
Whether you’re someone who is responsible for buying decisions at the place where you work or you’re the business owner, it can be tough to figure out when it’s time to move ahead on a big purchase or even whether you should move ahead at all. Buying the wrong thing could be disastrous both for you and the business but failing to make a move when your company really needs something can be a big mistake as well. Below are a few questions to ask that can help you make this decision.
Why?
The first thing you need to do is specifically articulate why you are buying the product. Sometimes, answering this question alone can make it clear what the right choice is. This is not just having fun at online casino in your spare time, it’s making major financial decisions for an entire business. If you need to purchase safety equipment to remain in compliance with OSHA regulations, you really don’t have much choice. On the other hand, this is often the moment when you realize that you aren’t entirely sure why you need the new product beyond the fact that you found out that some of your competitors have it and you think it looks interesting. Most why responses aren’t quite this cut and dry, however, so you’ll need to ask a couple more questions as well.
Why Now?
Maybe you need it, but do you need it now? What are the consequences of waiting until the next quarter or for the new fiscal year? Maybe you’re looking at buying fleet management software that can cut fuel usage and improve driver satisfaction. This software can give managers more real-time visibility into their fleet thanks to telematics. In a case like this, where the purchase provides clear benefits for savings and better operations, there seems to be little point in postponing unless there are serious fiscal difficulties. However, there may be other situations in which you judge that while you do want to go ahead with the purchase, the benefits of having it right now versus a few months down the road when it fits into the budget better are negligible.
What Are the Costs?
What it will cost, of course, is always a question, and there will be cases where the answer to this makes it clearly prohibitive. However, there may be related questions that you want to explore. Whether or not the cost is too high, are there less expensive alternatives? Another question to ask is what the associated costs are beyond the price tag on the item. These might include insurance, taxes, a maintenance contract, and staff training. It’s important to assess these costs as accurately as possible because they could end up being the bulk of the expense.
What Are the Consequences?
This is more of a thought experiment than the other questions above, which all have concrete answers. This is one to use if you’re still on the fence after considering all the above is what are the consequences if you don’t do anything? Even if you are practicing savvy financial tips try to imagine both the best and worst-case scenarios to get a sense of what is at stake.
