The small business sector in British Columbia has been hit hard by local and global supply shortages this year. Materials scarcity, overseas shipping delays, recent weather events and the COVID-19 pandemic have all impacted the procurement of goods and supplies.
Fortunately for small businesses, there are some simple steps they can take to turn around these challenges and drive their success in spite of the shortage. In this blog post, we will discuss how small businesses can handle supply shortages head-on and even use them as an opportunity to increase revenue and community connections.
Before delving into the following information, be sure to approach the situation with a willingness to adapt. Adapting is essential to survive the supply chain disruptions this season and in future occurrences.
Improve Supplier Relationships
A business’s relationship with its suppliers can influence its ability to navigate a potential supply shortage. For example, a company that maintains good relationships with its suppliers is more likely to have their needs prioritized over those that are viewed as problematic by the supplier.
4 Ways to Improve Supplier Relationships Include:
- Pay invoices on time or early if possible. Consider automated bookkeeping processes to ensure payments aren’t accidentally overlooked.
- Communicate with suppliers regularly.
- Refer good vendors to other businesses.
- Write an online review about the supplier.
Source Alternate Suppliers Locally
Many small businesses rely on overseas and international suppliers because it’s a proven way to reduce overhead costs and access hard-to-find products. However, when disruptions in the global supply chain occur, shipping costs may increase and product availability can plummet.
Sourcing alternate suppliers that are local may be a solution to help alleviate supply shortage issues. For instance, restaurants that rely on commercial food suppliers for their day-to-day operations may also be able to get comparable ingredients from local farmers.
Grow Your Network
Being part of your local business community can have advantages beyond growing the region’s economy and raising awareness about your company. A network of like-minded business owners can also serve to support one another throughout a supply chain disruption.
Examples of how small businesses can help one another navigate supply shortages include:
- Share supply inventories with other small businesses.
- Collaborate on joint marketing efforts.
- Increase buying power by combining orders with other companies purchasing from the same supplier.
Offer New Products
While not all businesses can pivot toward a new material or product line when faced with a supply shortage, those that can absolutely should. To prevent future problems associated with international shipping processes, focus on providing Canadian-made products and services as much as possible.
For example, a children’s clothing retailer with unfilled shelves can set up a “locally-sourced” section featuring handmade items from local crafters. Or, bakeries can offer bread and muffins infused with locally grown produce and milled flour.
Trust Your Client Relationships
While the fear of losing clients that rely on your business for certain brands or specific products is real, it shouldn’t prevent the addition of new and creative options from joining a product line.
Loyal customers are created by the people they interact with, not just the offered products. Continue to provide fantastic service, and be sure to communicate what your clients can expect from your business as the supply chain disruption unfolds.
The pre-order sales strategy has proven wildly successful for mega-companies such as Sony or Apple. However, small businesses that have played the pre-order game have also experienced great results. This is especially true for e-commerce stores.
Benefits of Pre-Orders in a Supply Chain Shortage
- Earn revenue while supply issues are resolved.
- Generate interest and hype towards a product.
- Conduct market research without committing to long-term production.
Explore Multiple Suppliers
When disruptions in the international supply chain occur, small businesses should explore working with multiple suppliers to mitigate the risks associated with possible product shortages.
This can be done by looking for suppliers with local or regional distribution centers, which will improve the chances of securing products when a shortage occurs. Additionally, diversifying supplier relationships can help small businesses negotiate better prices and make them less reliant on one vendor.
Maintain Accurate Inventory Data
One of the best ways small business owners can prepare for a supply chain disruption is to maintain accurate inventory data. This will help identify potential shortages before they occur and stay current on where each product category stands.
Some ways to improve inventory management can include:
- Automate supply notifications
- Encourage employees to report when an item/material is low.
- Regularly review stock and inventory
Improve Efficiency with Source Online’s Professional Bookkeepers
When small businesses are faced with supply chain disruptions, they can take steps to improve efficiencies that will reduce costs and increase customer satisfaction. This can include consulting with our professional bookkeepers.
Our team can help small businesses streamline and improve their payroll, inventory, and bookkeeping processes. Contact us to learn more about how we can help improve and assist with your business operations.