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by wmboy
3736 days ago
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Nice and concise answer! Just wondering if you can give some reasoning behind this? e.g. if approval is usually needed for purchases over $500, wouldn't they have to ask for approval if they're making a purchase that's essentially going to cost $4,788 out of the annual budget (if it's a $399/mo SaaS web app)? |
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The way it works is this: as a larger company, you want your people to be able to get their work done, that includes making purchases. You also want to set some rules around larger purchases (multiple 1000s of dollars), else people will end up throwing money away. So you set a fairly arbitrary rule that says "a manager of level X can spend up to level Y without approvals".
That's how you keep your business running but are fiscally responsible.
As a SaaS selling to businesses, you create TRUE business value (let's say you make my operation better someway, or save us time), and I pay you.
As a manager, the difference between 50$ and 500$ is invisible to me. With just 10 people reporting to me, I am likely spending 200, 300K/month (salaries, overhead, business costs, ...). The only thing I care about is not having to deal with the purchasing department or legal, because I know that will suddenly turn this quick and easy purchase of business value into a month-long process and it will cost me more time than I get value out of it. (aka it's no longer worth it).
And finally, now that you are charging $79 or $399, you can spend a significant amount of money (let's say 3 times monthly cost) on customer acquisition and create a proper business.