As a small business owner, you're probably aware of the supply chain issues impacting many industries. Whether you own a restaurant, a retail store, or another type of small business, it's become very challenging to keep your most popular items stocked while maintaining high customer satisfaction.
Here are some of the most common strategies small business owners can use to help solve even the most difficult supply chain issues facing their businesses and ensure that their operations continue to run smoothly well into the future.
Monitor Your Stock Closely
Tracking the inventory in your business is an important part of managing your supply chain. With supply chain shortages happening more frequently than ever, it's vital to know the quantities that you have in stock and when they need to be replenished. This is because you don't want to be surprised that you're running low on your most popular items only to discover that you're having trouble restocking them in time.
Explore Alternative Sourcing Options
Given that small business supply chains are unpredictable right now, it's helpful to be proactive and prepared because you don't always know when a specific item will suddenly become hard to find. One of the best ways to be proactive is to research alternative suppliers in multiple locations. Doing this gives you a better chance of maintaining your stock when previously relied upon suppliers can't come through for your business. Moreover, try to get creative when providing alternative options for your customers. For example, if you own a restaurant, you could see if there are alternative ingredients or different menu options for your customers.
Leave no stone unturned. You know which doors to knock on and where; however, trade shows, online markets, Google, and even social media like Reddit can be an option for those looking for more solutions.
Leverage Digital Tools to Manage Your Supply Chain
Small business owners can take advantage of cutting-edge software tools to help monitor and manage their supply chains. For example, supply chain management (SCM) software is a great asset you can use to help solve supply chain issues. SCM software allows small business owners to manage shipping, track inventory, and stay informed in real-time about which stock items are moving the quickest. Plus, your automated SCM can order more supplies the moment it falls below your designated threshold.
Be Transparent with Your Customers
Because supply chain disruptions are making many headlines as of late, the reality is that many of your customers are probably aware that some of your items may not be readily available like they used to be. Nonetheless, it's crucial that you be transparent with your customers about any potential disruptions to their orders. As a best practice, you should update customers on your website or via email that their orders could experience delays due to supply chain disruptions throughout your industry. Moreover, if particular items are facing repeated challenges, it's best to inform customers of this before they place their orders. This is because customers don't like getting surprised when they expected to receive their items in a few days, but it ended up taking several weeks.
Stay Up to Date on Current Events Impacting Your Industry
While some supply chain disruptions are unpredictable, not all of them are. For example, supply chains can be affected by supply and demand, geopolitics, market volatility, and even the weather for some small businesses. For these reasons, it's vital that you stay up to date on current trends in your industry and how those trends could affect your supply chain. Constant contact with your suppliers, something as little as a weekly call, can go a long way. By staying up to date, you can more easily anticipate potential shortages and more effectively manage your response, such as finding alternative suppliers that meet your standards.
Increase Your Inventory with a Business Line of Credit
For many small business owners, it may not be financially feasible to pay cash to stock up on items in short supply. Moreover, for many businesses, additional personnel and storage space would be needed to increase the stock of these items.
If this is the case for your business, the good news is that there are financing options you can consider that will give you access to the capital you need to increase your inventory on hand. A line of credit is one of the most effective financing options to help small business owners solve their supply chain issues. A line of credit functions like a credit card, meaning you can borrow what you need and pay back only that amount plus any interest. However, a business line of credit usually has a lower interest rate compared to a credit card.*
At Idea Financial, our lines of credit for small businesses received a 5-Star Rating from Trustpilot. These lines of credit offer up to $250,000 in funding and 36-month payment terms with no origination fees or pre-payment penalties. Draw fees are 1.99% - 2.99%, and every draw made restarts the repayment period.
Ready to Get Started with a Line of Credit for Your Business?
Our online application is fast and easy with same-day decisions. Once approved, you can draw from your available funds the moment inventory becomes available. Start your application now.
*Rates are based on industry averages and are contingent on the business credit profile. Note that Idea Financial does not perform hard inquiries on your personal credit.