James Shores explains how bad practices can be keeping your business from reaching its full potential and how to turn these weaknesses into strengths.
Hi. Welcome to this Whiteboard Wednesday. I’m James. We're gonna continue the conversation that we were having about New Year’s resolutions, and today's topic is removing bad business practices.
Now, much like the game “Operation” that we probably played growing up as kids, in today's example we need to remove those bad business practices from our business so that we can continue to thrive.
Slow to Pick Up
Are we responding to our customers’ calls, to their emails? They might have questions, they might even have a problem with an order or the product. We need to be prompt. Otherwise we're going to lose business, we’re gonna lose repeat customers.
This one’s really self-explanatory, but it still happens. You're losing money to late fees, but you’re also losing vendor loyalty. Where is it? Do you know where all your stuff is within your warehouse? Maybe it’s spread across a few different locations. I mean, do you know how much you have on hand and where it is and what its use is? Is it just sitting there? Is about to be used in a type of bill of materials? What's going on with it?
Man, this one’s one big one for a lot of companies, and this is one where a lot of people rely on a hunch. “Well, I think we need this much. I don't know how much we have on hand.” You should know how much you have on hand, how much is coming in, how much is going out, and how far out you are from your vendor as to when you can get the next shipment in of raw materials or whatever it is that your product requires, your customers are ordering from you.
Again, another no-brainer, but it's amazing how many companies don't realize the message that this sends to their customers. If you're sending out your deliveries late time after time you’re losing business, bottom line.
If you’re not keeping documents of all your transactions, whether it’s purchases, sales, accounting, and you’re always in a rush trying to figure out where things are, how much you owe, how many sales are coming in, you're hurting your own business because you're just wasting time here instead of managing this making it efficient.
So let’s talk about how we kind of fix some of this and take our tweezers and pull that out. So with an automated software solution, with the “Slow to Pick Up” we can send out emails immediately when a product is shipped to your customers.
With “Late Bills,” we can know exactly how much we’ve ordered and how much is owed and get that taken care of immediately, especially if our software solution ties into accounting software like QuickBooks.
“Where Is It?” With an inventory solution, you know exactly how much you have on hand, where it is, where it's going, and when it was last used. You can check product cycle all of that.
“Stockouts.” Again, this is one of the greatest features with an inventory solution because you know how much you have on hand, what’s about to be used for a purchase, how many sales they’ve recently had, and how far out your vendor dates are, so that you are never facing this moment again because if you have a stockout, what you’re ultimately losing are potential customers.
“Late Delivery.” With an automated software solution you can see, again, what needs be picked, what needs to be shipped, and with the right kind of software solution there’s UPS integration so you can send out on time, time after time.
Finally, “Sloppy Documents.” Now this is – we already kind of mentioned where the accounting side of software can come in, but if it ties in together with your inventory, it's all speaking to each other and so you’re inventory’s updating in real time your documents are being kept accurately and reflect all these numbers across your whole business.
So, again, I wanna leave with a quote from Bain & Company, and that is, “Replace hunches with metrics.” Don't make this guesswork. Find the hard data and use that to your advantage. Integrate a software solution so that you can look at the information and make informed business decisions. Pull all these things out so that your business can grow.
Thanks for joining us. See you again next week.