INVENTORY MANAGEMENT SYSTEMS: Is Your Warehouse a “Where? House?”
Why implementing an efficient Inventory Management System can increase profits.
contributed by Bill Donnelly, Bac2Profit LLC
Success starts with a vision, and visions are realized through effective planning. Effective plans are what separate the winners from the rest of the pack (called competitive edge) and having a solid plan will make operations run smoother, eliminating profit-eroding errors.
The benefits for you may be significant. Successful Inventory Management Systems can reduce warehouse operating expenses by 10 to 35%, or up to 1.0% point to the bottom line (assuming warehouse operations expense is equal to 2.0 to 3.0 of sales). Imagine what a 10 to 35% reduction in inventory carrying costs would translate into $$$ savings!
Maintaining an accurate count of the products in your warehouse by quantity and location will allow you to monitor and regulate storage at the SKU level, as well as, the corresponding shipping and receiving traffic. Keeping the “where?” out of your warehouse will make your business more profitable, while lowering stress levels for you, your customers and employees.
Are inventory transactions (i.e. internal movement, decrements, receipts, etc.), that can make major differences to your financial results, being accurately tracked? Have you evaluated your inventory tracking system lately? Is it as efficient as it needs to be? If not, what have you done to improve?
Thanks to Bill of Bac2Profit for Parts I & II on this topic. Check out his blog at: bac2profit.blogspot.com and OED's Community at http://www.oedmembers.org/ for more operational tips and insights.
Fostering the entrepreneurial spirit!
Monday, February 28, 2011
Friday, February 25, 2011
Is Your Small Business Exporting?
The Wall St. Journal is reporting today on growth initiatives by the federal government in regard to trade imbalances. These goals are aimed squarely at a sector often left out in the export game: Small Business.
Very interesting article, and raises some questions we need to pass along:
"U.S. trade officials are ramping up their export-growth initiative by targeting a key constituency that often feels left behind in the economic recovery: small businesses.
In an interview, U.S. Commerce Secretary Gary Locke said large U.S. corporations — which have vast marketing staffs around the world — already get “the full force of government” to help close contracts with governments and companies abroad.
But smaller firms haven’t gotten the same attention until recently, Locke said. Now they’ve become a central part of the Obama administration’s outreach effort as it aims to double American exports over five years. Expanding exports at U.S. firms would boost their sales and likely lead them to create more jobs, from engineering offices to factory floors.
'We need to help the small- and medium-sized companies,' he said. 'If they really want to grow their revenues and diversify their revenues, they need to look at the fact that 95% of the world’s consumers live outside the U.S.'
This month, several agencies — including Commerce, the Small Business Administration, Export-Import Bank and the United States Trade Representative — launched a nationwide tour to visit cities around the U.S. and work with local governments and nonprofits to encourage smaller companies to export. They carry a key set of statistics: Only 1% of U.S. companies export, and 58% of those firms export to just one country, typically to Canada or Mexico. The officials are trying to get smaller firms connected with the U.S. export machine, such as the Export-Import Bank, which provides financing for firms looking to export and can guarantee payments by foreign buyers." read more
Very interesting article, and raises some questions we need to pass along:
- Do you know small businesses exporting?
- If not, why not?
"U.S. trade officials are ramping up their export-growth initiative by targeting a key constituency that often feels left behind in the economic recovery: small businesses.
In an interview, U.S. Commerce Secretary Gary Locke said large U.S. corporations — which have vast marketing staffs around the world — already get “the full force of government” to help close contracts with governments and companies abroad.
But smaller firms haven’t gotten the same attention until recently, Locke said. Now they’ve become a central part of the Obama administration’s outreach effort as it aims to double American exports over five years. Expanding exports at U.S. firms would boost their sales and likely lead them to create more jobs, from engineering offices to factory floors.
'We need to help the small- and medium-sized companies,' he said. 'If they really want to grow their revenues and diversify their revenues, they need to look at the fact that 95% of the world’s consumers live outside the U.S.'
This month, several agencies — including Commerce, the Small Business Administration, Export-Import Bank and the United States Trade Representative — launched a nationwide tour to visit cities around the U.S. and work with local governments and nonprofits to encourage smaller companies to export. They carry a key set of statistics: Only 1% of U.S. companies export, and 58% of those firms export to just one country, typically to Canada or Mexico. The officials are trying to get smaller firms connected with the U.S. export machine, such as the Export-Import Bank, which provides financing for firms looking to export and can guarantee payments by foreign buyers." read more
Tuesday, February 22, 2011
Reducing Account Receivables Puts Cash in your Pocket
OED Certifed Advisor Dana Komar gives one pretty solid way to build cashflow. We could all use a little more of that, couldn't we?
Ignoring your outstanding receivables can restrict you from having enough cash flow to properly invest in your company or to pay your vendors on time. This can earn you a reputation as an unreliable business partner or result in unnecessary spending on late payment fees. If this the case, you have to make sure you are not creating the situation yourself by allowing your customers too long of a collection period compared to your payment terms. There are a few things you can do to reduce the time lag between when your customers buy the product and when you receive payment, without wasting time hassling them.
For instance, the faster you invoice them after the order, the sooner their payment deadline will be. To make this easy on yourself, email your invoices rather than using snail mail. It is important to have the exact due date the invoice, rather than just the terms. Make it easy for your customers by allowing them to pay electronically and by credit card. PayPal is a secure convenient payment method and you can put a link right in your invoice email. Also, be sure to have clear penalties for late payments. Your vendors have them, so why shouldn’t you?
Ignoring your outstanding receivables can restrict you from having enough cash flow to properly invest in your company or to pay your vendors on time. This can earn you a reputation as an unreliable business partner or result in unnecessary spending on late payment fees. If this the case, you have to make sure you are not creating the situation yourself by allowing your customers too long of a collection period compared to your payment terms. There are a few things you can do to reduce the time lag between when your customers buy the product and when you receive payment, without wasting time hassling them.
For instance, the faster you invoice them after the order, the sooner their payment deadline will be. To make this easy on yourself, email your invoices rather than using snail mail. It is important to have the exact due date the invoice, rather than just the terms. Make it easy for your customers by allowing them to pay electronically and by credit card. PayPal is a secure convenient payment method and you can put a link right in your invoice email. Also, be sure to have clear penalties for late payments. Your vendors have them, so why shouldn’t you?
Monday, February 21, 2011
THE OED 500 IS OPEN!
OED is once again providing a $500 prize and promo pack to a deserving small business! Simply visit www.oedglobal.org for details and the application.
Applications are being accpeted now through March 15. Winner will be announced March 31. Enter and share the link with your colleagues, clients, vendors... you name it! Entrepreneurs helping entrepreneurs~ It's what OED's all about!
The OED500 is a quarterly program sponsored by The Organization for Entrepreneurial Development. OED is a 501(c)(3) whose mission is to support entrepreneurs through a variety of media and methods such as live training, professional development, webinars, networking events, knowledge base access, and idea exchanges.
Applications are being accpeted now through March 15. Winner will be announced March 31. Enter and share the link with your colleagues, clients, vendors... you name it! Entrepreneurs helping entrepreneurs~ It's what OED's all about!
The OED500 is a quarterly program sponsored by The Organization for Entrepreneurial Development. OED is a 501(c)(3) whose mission is to support entrepreneurs through a variety of media and methods such as live training, professional development, webinars, networking events, knowledge base access, and idea exchanges.
Wednesday, February 16, 2011
What makes a great ad?
The answer is almost too simple.
A good ad is one that works. Your phone rings. Buyers walk through your store door. Your salespeople have prospects to see. Your e-mail order forms are full.
On the other hand, bad advertising is one of the most disappointing experiences a small business can have. You spend your hard-earned ad dollars with high hopes, only your hopes and expectations dashed with a complete lack of response.
Here are three critical items to keep in mind to make your ads draw customers and sales:
1. Figure out what means the most to your best prospects. What do you offer that they'll value most? State that best benefit clearly and prominently in your ad. If you've got lots of space or radio time, repeat your benefit at least three times.
2. Tell your prospect to buy. Ads that don't come right out and ask for the sale usually fall short. Tell your prospect to buy, why they should buy, how they should buy, and when to buy. Take a look at pricey ads designed for big companies. They almost always tell you exactly who they think needs their product or service, which store or web site you can buy it from, how to get to that location, what kind of cards or financing they take, and when the offer will begin and end.
3.Finally, pick your advertising media carefully. Don't advertise a specialty service for a particular industry in your daily newspaper unless your town is dominated by that particular industry. Instead, chose a trade publication that specifically targets that one industry.
4.Simple? Yes it is, as long as you make the whole advertising process a real PROCESS!
Do a features, advantages and benefits work-up and determine your key benefits.
Talk to you customers and find out why THEY buy.
Use professionals where you can – they can save you hours and dollars by helping you develop a process that works and once it’s developed – you have it forever.
A good ad is one that works. Your phone rings. Buyers walk through your store door. Your salespeople have prospects to see. Your e-mail order forms are full.
On the other hand, bad advertising is one of the most disappointing experiences a small business can have. You spend your hard-earned ad dollars with high hopes, only your hopes and expectations dashed with a complete lack of response.
Here are three critical items to keep in mind to make your ads draw customers and sales:
1. Figure out what means the most to your best prospects. What do you offer that they'll value most? State that best benefit clearly and prominently in your ad. If you've got lots of space or radio time, repeat your benefit at least three times.
2. Tell your prospect to buy. Ads that don't come right out and ask for the sale usually fall short. Tell your prospect to buy, why they should buy, how they should buy, and when to buy. Take a look at pricey ads designed for big companies. They almost always tell you exactly who they think needs their product or service, which store or web site you can buy it from, how to get to that location, what kind of cards or financing they take, and when the offer will begin and end.
3.Finally, pick your advertising media carefully. Don't advertise a specialty service for a particular industry in your daily newspaper unless your town is dominated by that particular industry. Instead, chose a trade publication that specifically targets that one industry.
4.Simple? Yes it is, as long as you make the whole advertising process a real PROCESS!
Do a features, advantages and benefits work-up and determine your key benefits.
Talk to you customers and find out why THEY buy.
Use professionals where you can – they can save you hours and dollars by helping you develop a process that works and once it’s developed – you have it forever.
Monday, February 14, 2011
Test Your New Products--Without Spending a Fortune
Can small companies really expect to do the same level of product testing as large corporations with multi-million dollar marketing budgets?
While they usually can't spend the same amount of money, owners of small businesses have significant advantages not only in product testing, but in the whole area of market research: They usually have extensive familiarity with the marketplace.
Owners can use their experience to develop product testing programs that aren't necessarily very expensive. Still and all, business owners should be prepared to conduct research that includes the following components:
1. Doing a survey. This requires constructing a questionnaire, locating prospective customers, and getting their answers to the questions (typically by telephone or via a mailed questionnaire). Some major corporations even conduct these kinds of surveys in supermarkets or shopping centers. With some representative sampling of several hundred prospects, it is possible to draw conclusions about what they want or don't want. Unfortunately, this is an expensive and time-consuming approach to market research that most entrepreneurs don't have either the money or the patience for.
2. Interview potential customers. The focus group approach entails getting five to ten prospective or existing customers together in a group for an hour or two to probe their feelings about a particular product or service. While the results aren't statistically reliable because such a small group is being sampled, the input is extremely valuable. Many successful entrepreneurs lean toward the second approach, trying to compensate for the absence of statistically meaningful responses by listening carefully as people respond to questions and ideas.
3. Assessing the competition. If there is one area where successful entrepreneurs agree that academic type research can be useful, it is in the area of competitive information. They know that it is essential to know as much about the competition as is humanly possible, and the best place to get that aside from on-site observations is at libraries, through electronic data bases, and via literature put out by competitors.
4. Learning from others. Has your competition already tried your idea? Are they still using it? Why or why not? Answering such questions can help you avoid errors and learn from the mistakes of others.
5. Testing a prototype. A prototype of a product or service is basically a trial version--a single model or small batch of product or an experimental version of a service. Prototypes become more important as the expense of the product or service rises. The last thing a new company with a $10,000 or $20,000 product wants to encounter is a serious flaw or customer complaint after hundreds or thousands of the product have been produced.
Clearly, owners of small businesses can compensate for their lack of major marketing budgets with careful planning and close listening. The key for owners is to use their knowledge of the marketplace to ask the right questions and fill in the missing data that leads to successful decisions.
While they usually can't spend the same amount of money, owners of small businesses have significant advantages not only in product testing, but in the whole area of market research: They usually have extensive familiarity with the marketplace.
Owners can use their experience to develop product testing programs that aren't necessarily very expensive. Still and all, business owners should be prepared to conduct research that includes the following components:
1. Doing a survey. This requires constructing a questionnaire, locating prospective customers, and getting their answers to the questions (typically by telephone or via a mailed questionnaire). Some major corporations even conduct these kinds of surveys in supermarkets or shopping centers. With some representative sampling of several hundred prospects, it is possible to draw conclusions about what they want or don't want. Unfortunately, this is an expensive and time-consuming approach to market research that most entrepreneurs don't have either the money or the patience for.
2. Interview potential customers. The focus group approach entails getting five to ten prospective or existing customers together in a group for an hour or two to probe their feelings about a particular product or service. While the results aren't statistically reliable because such a small group is being sampled, the input is extremely valuable. Many successful entrepreneurs lean toward the second approach, trying to compensate for the absence of statistically meaningful responses by listening carefully as people respond to questions and ideas.
3. Assessing the competition. If there is one area where successful entrepreneurs agree that academic type research can be useful, it is in the area of competitive information. They know that it is essential to know as much about the competition as is humanly possible, and the best place to get that aside from on-site observations is at libraries, through electronic data bases, and via literature put out by competitors.
4. Learning from others. Has your competition already tried your idea? Are they still using it? Why or why not? Answering such questions can help you avoid errors and learn from the mistakes of others.
5. Testing a prototype. A prototype of a product or service is basically a trial version--a single model or small batch of product or an experimental version of a service. Prototypes become more important as the expense of the product or service rises. The last thing a new company with a $10,000 or $20,000 product wants to encounter is a serious flaw or customer complaint after hundreds or thousands of the product have been produced.
Clearly, owners of small businesses can compensate for their lack of major marketing budgets with careful planning and close listening. The key for owners is to use their knowledge of the marketplace to ask the right questions and fill in the missing data that leads to successful decisions.
Saturday, February 12, 2011
Success
"Change your thoughts and you change your world." - Norman Vincent Peale
"When I was young, I observed that nine out of ten things I did were failures. So I did ten times more work." - George Bernard Shaw
“The person who chooses to try something and fails is a far greater person than the person who chooses to try nothing and succeeds!”
“The difference between the successful person and the unsuccessful person is that the successful person is willing to do that which the unsuccessful person is not!”
"When I was young, I observed that nine out of ten things I did were failures. So I did ten times more work." - George Bernard Shaw
“The person who chooses to try something and fails is a far greater person than the person who chooses to try nothing and succeeds!”
“The difference between the successful person and the unsuccessful person is that the successful person is willing to do that which the unsuccessful person is not!”
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