Business Education

How Businesses can Deal with Inventory Supply Shortages

Inventory supply shortages will happen. Sometimes, it’s due to overwhelming consumer demand, leaving businesses unable to keep stock. Other times, like now, inventory supply shortages occur as a result of material shortages and/or manufacturing issues. At this time, lumber and other essential construction materials are in short supply. Likewise, computer processing chips are also limited in supply. So, if this happens to your business, you need to be prepared.

Inventory Shortages are Inevitable

There’s no such thing as unlimited supply when it comes to material inventory. Whether it’s a disruption in the supply chain or sudden and unexpected limit of raw materials, the end result is the same — businesses can’t keep their shelves stocked. When put in this precarious situation, sales are inevitably affected, usually negatively.

COVID-19 has had a disruptive effect on the global supply chain, and small businesses are not immune. An average of more than 30% of American small business owners across sectors still reported a disruption to their supply chain in June 2020 data, months into the pandemic. Supply-chain disruptions can affect small businesses in many ways: They can reduce revenue, inflate costs, cut into market share, or cause issues with production—all of which can damage a company’s bottom line. —The Balance Small Business

Of course, a drop off in sales can be temporary and inflict minimal damage. But, a prolonged shortage will certainly cause a lot of monetary damage. If there’s enough inventory missing for a long enough period of time, it can spell the end of a business altogether.

Ways Businesses can Deal with Inventory Supply Shortages

When inventory supply shortages occur, it’s only prudent to react with strategic means. Business owners must act immediately, particularly if there’s a sense the shortage will go on for a lengthy period of time. Here are four ways businesses can deal with an inventory supply shortage:

Explore alternative vendors. Fortunately, there are usually a few or more vendors who supply businesses with the same types of inventory. Even a source that’s a bit more expensive can be worthwhile if it keeps customers coming through the door. (And, better still, if competitors aren’t willing to pay a higher sourcing price.)
Clearly communicate with customers. There’s simply nothing good that can come from not being totally up-front with your customers. In fact, there’s hardly more that is counterproductive. If you experience an inventory supply shortage, let your customers know what’s going on — especially if it’s expected to last for a significant amount of time.
Tap into super-sized, large bulk orders. Much like the first suggestion, you might find inventory for products in short supply in larger bulk orders. Obviously, you’ll have to run the numbers to determine if it’s financially viable and doesn’t present too much a risk.
Identify problems with inventory management. There are times when businesses have inventory issues that are caused by their own ordering and selling practices. Go over your procedures to identify any problems and then apply sensible solutions.

What other suggestions do you have? Please take a few moments to share your thoughts and experiences so others can benefit from your unique perspective! Your input could really help someone out! Interested in learning more about business? Then just visit Waters Business Consulting Group.

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The Valuable Business Lessons of 1873, 1893, Mars Music, and Tomorrow

October 17, 2024 No Comments

Back in the late nineteenth century, America experienced an incredible economic boom. With the Civil War long over and people moving west, the country enjoyed a boom cycle that lasted nearly a decade. Ironically, this good fortune would sour and become the direct cause of a national crisis. Throughout history, the business world has been marked by cycles of boom and bust, often fueled by ambition and the allure of rapid growth. The economic panics of 1873 and 1893, along with the rise and fall of companies like Mars Music over a century later, offer valuable lessons for entrepreneurs and businesses today. Although separated by decades, these historical events share a common thread: the dangers of hasty, unchecked overexpansion. So, let’s take a long look at these pivotal moments, exploring how aggressive growth without a solid foundation can lead to catastrophic outcomes and what modern businesses can learn to avoid similar pitfalls in the future. The Commonality Between the Panics of 1873 and 1893 and the Collapse of Mars Music While the Panic of 1873, the Panic of 1893, and the collapse of retailer Mars Music occurred in vastly different historical contexts and economic climates, they share a fundamental commonality: hurried overexpansion and excessive debt. Both panics were triggered by overindulgent speculation and unsustainable debt levels in various sectors of the economy. In 1873, it was primarily in railroads and manufacturing, while in 1893, it was in railroads, silver mining, and other industries. Approximately 109 years later, while not on the same scale as the panics, Mars Music’s collapse was also driven by overexpansion and excessive debt. The retailer opened new stores at too rapid a pace, leading to high operating costs and a strain on its financial resources. Regardless of the specific causes, the consequences of these events were remarkably similar because they all share a common thread: the negative impact of financial instability and economic downturns. These crises highlight the importance of prudent financial management, risk assessment, and adaptability in the face of changing economic conditions. Slow and Steady Wins the Race: How Businesses Can Grow Sustainably Without Over-Expanding The rush to grow can feel like a race. Every entrepreneur wants to expand, bring in more profits, and become a household name. But, just like in any race, sprinting too fast can lead to serious missteps. So, how can businesses avoid over-expansion and ensure they grow at a healthy, sustainable rate? Well, there are some things you can do to avoid making such mistakes: Understanding the dangers of over-expansion. Let’s begin with a simple exercise. Imagine trying to walk on a tightrope while juggling. It’s tough, right? That’s what over-expansion feels like. Businesses that push too hard to grow often spread themselves too thin, losing focus on what made them successful in the first place. This can lead to lower-quality products, unhappy customers, and ultimately, shrinking profits. Set clear and achievable goals. Goal-setting is comparable to having a roadmap for your journey. Without clear directions, you might find yourself going in circles or heading off a cliff. By setting specific, measurable, and realistic goals, businesses can focus on growth steps that truly make sense. For instance, instead of thinking about opening ten stores at once, aim for one or two first. Get those right, and expand from there. Know your market inside and out. Think of your market as an ocean. If you don’t understand the tides, you’re likely to capsize your boat. Businesses need to research their target audience, understand their needs, and know the competition. This knowledge helps in making smart decisions, such as when and where to expand. By keeping a close eye on market conditions, businesses can spot opportunities without taking unnecessary risks. Focus on quality over quantity. In the race to grow, it’s easy to get excited about numbers. But remember, a small number of happy customers is far better than a big number of unhappy ones. Businesses can build a loyal customer base by focusing on creating high-quality products or services. Satisfied customers tend to return and spread the word, leading to organic growth that doesn’t come with the pitfalls of over-expansion. Keep a close eye on finances. Just as a gardener checks the soil before planting seeds, business owners should keep track of their financial health. Understanding cash flow, expenses, and profit margins can prevent a business from becoming overgrown and unmanageable. By monitoring finances regularly, companies can decide when it’s the right time to invest in growth and when it’s best to hold back. Invest in employee development. Think of employees as the roots of a mighty tree. Without strong roots, the tree can’t grow tall and wide. Investing in training and development keeps employees engaged and productive. Happy, skilled employees lead to better customer service and improved products, strengthening the business from the inside out. When the foundation is solid, the possibility for expansion becomes much easier to handle. Embrace innovation gradually. Innovation is akin to adding spice to a dish: too much can ruin the flavor. Businesses should embrace new ideas, but it’s essential to do this gradually. For instance, before launching an entirely new product line, consider introducing an improved version of an existing one. This allows businesses to gauge customer reaction and make adjustments without risking it all on a big gamble. Last but not least, continually cultivate customer relationships by building strong relationships with customers. It’s all about nurturing connections that promote loyalty. Engaging with customers through feedback loops, surveys, and social media can provide insights into what they love and what needs improvement. This dialogue can guide businesses to grow wisely, responding to customer needs rather than assuming what they want. The Path to Sustainable Growth In the end, sustainable growth is all about balance. Just as a well-fed plant needs regular care, businesses thrive with careful attention and planning. By setting achievable goals, knowing the market, focusing on quality, keeping finances in check, investing in employees, innovating wisely, and nurturing customer relationships,

Biggest Mistakes to Avoid when Selling a Small Business

April 14, 2022 No Comments

When it comes time to sell your small business, you want to make sure that you avoid making any major mistakes. If you wait too long to sell, you may miss out on a great opportunity. If you don’t find the right person to represent your business, you could end up selling it for much less than it’s worth. And if you don’t market the business for sale, you may not get the best price. In this article, we will discuss five of the biggest mistakes to avoid when selling your small business: Not finding the right person to represent the business: If you don’t find the right person to represent your business, you could end up selling it for much less than it’s worth. It’s important to find someone who knows how to negotiate and who has experience in selling businesses. Otherwise, you may not get the best price for your business. Most sellers don’t expect the exit from their company to be easy, but many are surprised by how difficult it can be to sell their business for a good price in a reasonable timeframe, especially in the current economic environment. It’s important, however, to not let frustration get in the way of maximizing your sale. —Entrepreneur.com Before you speak with a business broker, it’s highly advisable to get your corporate affairs in order and understand the process. An experienced business consultant can help with these and much more. The bottom line is, that you need to know key details in order to identify the right buyer. Forgoing marketing the business for sale: If you don’t market the business for sale, you may not get the best price. You need to let people know that the business is up for sale and you need to promote it in order to attract potential buyers. You want multiple buyers interested in making offers so that the demand drives up your selling price. This doesn’t mean spending copious amounts of money. But, it does mean advertising smartly to the right people. Asking too much or too little for the business: If you ask too much for the business, you may not get any offers. If you ask too little, you could end up selling the business for less than it’s worth. It’s important to find a fair price that will attract buyers but that won’t leave you feeling like you’ve given away your hard work for nothing. Conversely, if you put it up for sale at a discounted price, otherwise interested buyers might think you’re trying to sell to get rid of a headache. Selling to the wrong person or other company: If you sell to the wrong person or other company, you could end up regretting it later. Make sure that you know who you’re selling the business to and that they are someone who will be able to take it in the direction you want it to go. In other words, someone who shares your business values and approach. Otherwise, you could see your beloved creation turn into something you would never want it to be. These are just a few of the biggest mistakes to avoid when selling your small business. By following these tips, you can help ensure that you get the best price for your business and that you don’t end up regretting the sale later on. If you have any questions about selling your small business, please feel free to contact us anytime! We would be happy to help! Interested in learning more about starting, running, buying, or selling a business? Then just visit Waters Business Consulting Group.

Why Hosting Thanksgiving Dinner Teaches Us a Great Business Lesson

December 11, 2017 No Comments

Yes; you read the title correctly, hosting Thanksgiving dinner can teach us a very good business lesson. How; you might ask? Well, think about it this way. When Thanksgiving rolls around and you’re hosting dinner, what’s one of the first concerns which goes off in your head? Of course, being anxious about getting the meal cooked right is one. But, equal to that is how much of a mess your home is! You begin to panic. It’s a total mess. Things are everywhere. The floor is dirty. And, you notice just how cluttered it is. Time to do some serious cleaning and organizing. Why Hosting Thanksgiving Dinner Teaches Us a Great Business Lesson It’s a known fact that where you work affects just how you work. For example, if you worked in a chaotic environment, like an elementary classroom, you’d have little choice but to stay well-organized. However, too many business professionals let their workplace become disorganized. And, it causes needless wasting of time. So you’ve got a messy office you’d like to tame. We’ve all been there, and many of us still are there. You may think that the people behind your favorite productivity and organization blogs are immune to such things like clutter and disorganization, but more often than not we’re brimming with organization tips, tricks, and solutions because of our own struggles with disorganization. —Lifehacker.com Now, you might disagree. There are people who believe a messy workplace doesn’t really matter at all. But, it actually does. Organization is a key factor. It’s particularly integral to success. Without organization, there’s too many loose ends. Those can easily become distractions. Or worse, cause serious problems. How to Do Office Organization Right When you ignore disorganization, it inevitably comes back to bite you. It’s a quasi-blind spot. A well-organized workplace has big advantages. First and foremost, it gives you a genuine feeling of control and competence. That directly translates into improved and increased productivity. Second, because it’s organized, you’re more free of pointless or counterproductive distractions. Third, it allows you to put your focus where it bests serves your interests. So, let’s look at how to do office organization right: Purge with purpose. The first step is to get rid of as much junk and useless stuff as possible. Purge everything that’s unnecessary or unusable. Take this seriously and you’ll feel an instant sense of gratification. You’ll also be amazed how much space you free up. Designate catch-it spaces. There are all kinds of things that come into a workspace, be it an office, a workshop, or retail store. So, designate where that stuff goes. For instance, a place for things like an umbrella, bags or briefcases. As well as a place for incoming documents and other things. Basically, live the phrase, “A place for everything and everything in its place.” Keep your workspace clutter free. The single best way to stay organized is to keep clutter away. Don’t ignore junk, things, and stuff that come into your workspace or you’ll fall right back into the same cycle. Keep it free of clutter and you’ll develop a good habit. Prioritize and always act accordingly. Another good habit to develop is prioritizing. It’s a great way to know what’s next and what can wait. A shotgun approach is a sure-fire way to disorganization and confusion. Plus, you’re unlikely to get very much done. How do you deal with junk and get organized? Have you found you’re more productive when your office is neatly organized? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.