As an entrepreneur you need to find ways to reduce costs without sacrificing the quality of your products. The suppliers you choose can have a positive impact on your cash flow and profits. If their prices are too high, your revenue shrinks. If their price is low, but you get poor quality inventory, you might lose customers.
These supply chain management for small business tips can help you.
Identify Reliable Suppliers
A supplier can make or break your small business. If they charge too much, you’ll only break even or only earn a small profit. They might be cheap, but their materials or inventory are low quality. One of the supply chain tips you should follow is to identify a reliable supplier. Before you choose one, read about the experiences of their previous and current customers. Review their prices and service inclusions. You can setup a meeting with them to learn more about how they can help your small business. Get as much information from the suppliers on your shortlist as possible so that you can make the right decision.
Consider Multiple Suppliers
You’ll never know when a supply chain disruption may occur. When this happens, there might be delays or cancellations of deliveries. This will have a negative impact on your sales and may prevent you from meeting customer demand. Consider getting materials and inventory from different suppliers to reduce the effects of disruptions. Look for reliable suppliers from different locations that offer prices that don’t reduce your profit. You can ask for referrals from your existing supply network. They might know someone who can work with you.
Effective supply chain management for small business owners requires them to communicate regularly with suppliers. Set the initiative in sending emails (and responding to them), making phone calls, meetings and other forms of communication. You won’t know much about what’s happening in your supply network, if you don’t reach out. Monitor deliveries and keep hard and soft copies of invoices, receipts and important documents. This allows you to track orders and identify problems along the chain. Regular communication also eliminates or at least reduces confusion about lead and delivery times, orders, due payments and others.
You want to get the best possible price for the materials or inventory you purchase. A lower price without sacrificing quality boosts profits. Negotiate the terms of your contract with suppliers. Get the deal that offers the best value. Try to create a win-win situation for all parties involved. If suppliers give you inventory at the price and terms you want, you should give them something similar in return.
Business Relationship Based on Trust
Establishing a strong business relationship with suppliers is important. They should trust you and you should trust them. Build this by paying on time, treating their staff well, communicating with them regularly and forgiving minor mistakes they corrected. This business relationship based on trust enables you to negotiate for good payment and credit terms. A supplier might prioritize your deliveries first and give you better prices for bulk orders.
Technology simplifies tasks that would otherwise consume a lot of time and resources. Look for apps, software, programs, machines and others that you can use. These can automate certain tasks and eliminate redundancies that cost money. You can redirect these funds to other aspects of your small business.
These supply chain management for small business tips enable you to create a strategy that reduces costs and increases revenue. The implementation of these may lead to changes in your accounting books. We at Robookkeeper can provide you with affordable bookkeeping services. Let our team do your bookkeeping so that you can always review updated financial information whenever you need to make business decisions.