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The Importance of Procurement Management in Your Cafe Business

  • 4 min read

Effectively Managing Procurement in Your Coffee Shop

Procurement is the process of buying goods and services for your business, and it plays a critical role in the success of any cafe or coffee shop.

When you understanding the importance of procurement in your business, you can make informed decisions about your supply chain, negotiate better prices and terms, and improve your cafe business’s performance.

What Good Procurement Means For Your Cafe

Good procurement practices include:

  1. Consolidating your purchases and working with a smaller number of suppliers, so you can negotiate bulk discounts and other favourable terms that help to reduce your overall costs.
  2. Improving the quality of what you sell by working with high-quality suppliers. Partnering with reliable suppliers who consistently deliver high-quality products, so you can improve the overall customer experience and satisfaction for your customers.
  3. Building strong relationships with suppliers and having contingency plans in case of disruptions. You can minimize the risk of supply chain disruptions to protect your cafe business’s performance when you are practicing good procurement management.

Cafe Procurement Management

To effectively manage procurement in your cafe or coffee shop business, there are a few key steps –

1. Determine your procurement needs

The first step in managing cafe procurement is to determine your business’s buying needs. This will help you identify the types of goods and services you need to operate your business and ensure that you have a steady supply of these items.

In a coffee shop, it’s more than the ingredients for your menu items. It includes the technicians who service and repairs your equipment (fridges, coffee machines, air-conditioner, cash register, etc). The supply companies you get your utility services from (water, electricity, gas, internet, monitored alarm security, waste removal, etc). The agencies you buy your crockery, cutlery, kitchen utensils, packaging, display signage, etc.

2. Shortlists of potential suppliers

Once you have determined your procurement needs, the next step is to identify potential suppliers who can meet these needs.

Millionaire Maker Dan Kennedy says “the most dangerous number in business is one.

When it comes to identifying suppliers, have options and create a list with your preferred supplier as first and then have two or more alternatives you can call on in an emergency.

Research suppliers online, network with people in your local community or other cafe owners, or seek recommendations from other business owners. Social media sites like LinkedIn, TrustPilot and YouTube can also be helpful, as are Google Reviews.

Make a list for each of the different types of suppliers you need, so that you have cafe procurement options.

3. Evaluate and compare suppliers

Once you have identified potential suppliers, the next step is to evaluate and compare them to determine which ones are the best fit for your business. This could involve reviewing factors such as price, quality, reliability, and delivery times to determine which suppliers offer the best value.

Put the suppliers in a ranked order with your favourite as number one.

This ensures that if you have challenges with negotiating terms, you have a next best option ready to talk to.

4. Negotiate terms

Once you have selected your suppliers, the final step is to negotiate and finalize deals with them. This could involve negotiating prices, payment terms, delivery schedules, and other terms and conditions to ensure that you are getting the best value for your cafe business.

The negotiation process can be extremely frustrating, so you may need to compromise with some of your suppliers to get terms that are best for you. In some ways good cafe procurement management is about being able to juggle the conflicting interests of your suppliers and you.

It is important to regularly review and update your procurement practices to ensure that you are getting the best value from your suppliers and continue to meet the needs of your business.

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