Disruptions are a fact of life in business but can also significantly impact your business. The key is to be prepared for them and have a plan for dealing with them when they occur.
Here are six tips for handling disruptions in your business:
1. Establish a centralized management center
This is easier to do if you have one store and one location. You’ll want a main store - aka headquarters- you have multiple stores.
This will be incredibly important for your vendors, customers, and employees, so they have one central location to report all information. It will also centralize all the information in decision-making during a crisis.
2. Speak with one voice
Consider having a leadership meeting for 5-10 minutes each morning. It will allow you to share important information, prioritize jobs, and enable the leadership team to make better decisions.
As a business owner, you must ensure you have a pulse on the business. Even if you have only one store, this is an excellent habit. If you have a team of employees, it’s more important to meet and share information. It will help create a message about your company that employees can communicate to customers and vendors.
3. Swimming in your lane
Let’s be honest; if you don't have all the information, you probably can't make a very good decision.
But the opposite is true too.
Having all the information can be devastating to making a decision. When we try and get everything at once, it's easy for our brain not to have enough space which works out what should go where to find an answer quickly - but by collecting pieces as they come up (kind of like a puzzle), you can give yourself more time because there isn't just one way through these problems!
Not making a decision is also making a decision. You want to ensure you have enough information to make a good, smart, and wise decision. But, waiting too long for a perfect choice might mean that your current plan will no longer work because someone else has already taken advantage of it while you wasted time doing nothing!
4. Map out your supply chain
Knowing your supply chain is essential to handling supply chain disruptions and finding out how vendors operate. That includes knowing where their factories are located, what the raw materials are to make, what fabric and notions require for manufacturing, the shipping methods, etc.
Understanding how your suppliers work will help you understand and provide better information to your customers, giving you a bigger and fuller picture. It may also be wise to diversity our vendors and suppliers to help reduce those inventory shortages.
5. Manage your customer demand
Knowing how to handle customer demand during supply chain disruptions is critical.
Allocation
Knowing what products sell faster than others is the key to understanding your inventory. If you know what is selling fast, you can make accommodations to match the demand.
You can focus your resources on the products people want rather than things they aren’t buying. This is especially effective if you understand exactly who your niche customers are.
Auctions
Auctioning off your inventory can be a great way to make room for new products and generate more revenue. I've seen this happen in retail, where they'll actually turn their store into an auction house because there are only so many goods that one company has, even though it may seem like plenty at first glance; when the demand outweighs what supply exists then auctions become necessary or else profiteering from customers who want to buy without having too much hassle with shipping fees, etc.
Substitution
If you can't get the thing that your customers really want, do something similar enough to provide a solution or make up for it by offering other products. You could also raise prices on hot items to draw people's attention away from what they're currently buying and towards purchasing one of these substitutes instead.
6. Set up a plan for recovery
Sometimes we often get stuck just putting out short-term fires. Those short-term fires give us an excellent opportunity to set up for the long term.
Profit first will help with your cash management during a time of crisis. Every business has the same basic foundations, but with Profit First, you can adjust it to fit your needs.
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