Supply chain issues have been causing a headache for small businesses since the start of the pandemic in 2020. Between shutdowns, labor shortages, fluctuations in demand, and logistics issues, supply chain challenges seem to be an ongoing problem that is here to stay. So how can you overcome the supply chain disruption without it causing serious consequences for your small business? Try these 4 tips below:
Stock up on Inventory Whenever Possible
When items become available, you should be buying inventory in bulk to prevent running out of things. Having a bigger stockpile than usual can help keep your business running smoothly when supply chain disruptions make inventory hard to find. Not only will you get a better price when buying in bulk, but buying extra inventory now will save you money in the long run if your supplier’s prices increase due to inflation.
Unlike larger businesses who often have access to extra capital, many small businesses have a limited cash flow which could prevent them from being able to seize the chance to stock up on inventory. A business line of credit can be used to cover rising inventory costs, to help you stockpile critical items, to pay for additional storage space to make room for extra inventory, or simply to improve your cash flow.
Look for Alternative Suppliers
As a small business, it is important not to put all of your eggs in one basket. Although you may be satisfied with your current supplier or manufacturer, now is the time to diversify and seek out alternative companies to partner with. This will help you secure the products or materials you need to run your business in the event that your current supplier can’t fulfill your order. Remember to cast a wide net when looking for alternative suppliers (i.e., looking for ones that are not in your region or manufacturers that carry items that are similar to the ones you need, but not exactly the same). If you only have suppliers from one geographical area, then any issues that one supplier faces are probably also going to impact the others.
When goods are hard to find, small businesses have to get creative about finding alternative products or services to offer their customers. Try to think of ways to incorporate available inventory into your product offerings. A few examples could be:
- A restaurant experimenting with alternative ingredients for a popular dish instead of taking it off of the menu completely
- A retail store creating displays promoting in-stock items
- A printing company offering their usual product line, but on alternative paper types or with different finishes or inks
- A bakery creating new pastries to offer with ingredients that are easy to get
Be Transparent with Your Customers
Maintain trust with your customers by being completely transparent about the supply chain issues your business is facing. Letting people know when items are backordered and if orders will take longer than usual to complete is crucial to customer satisfaction. You can use social media, your website, and email to communicate with them about what’s available, when you expect a product will be back in stock, various product substitutions you can offer, and when they can expect delivery.
Having Adequate Capital Can Help Your Business Better Manage Supply Chain Disruptions
At Fundible, we understand small businesses and the challenges they’re faced with. Finding the right small business financing options to meet your industry-specific needs doesn’t have to be difficult. Contact us today at (855) 784-0008 or apply today to get started!