The past few years have seen significant kinks in the supply chain due to several reasons: inconsistent buyer behavior, source material scarcity, government shutdowns, and worker shortages, to name a few. What can a business owner do to protect their businesses from shortages that result in revenue loss? Let’s take a look at a few ideas.

Source New Suppliers

Being dependent upon only one supplier for a critical item is risky. Increase your options by finding new suppliers to use as backups or alternates whenever you can. While it’s admirable to buy local, it’s not always possible. Expanding your network will provide you with a lot more flexibility, even if you have to pay a bit extra at times.

Understand Your Timeline

How accurate is your prediction of lead time? Are you providing enough time for ordering and delivery before you need the part in-house? Timelines have changed a lot in the last year. Spend some time reviewing and recalculating lead time if you need to.

Fine-Tune Forecasting

Get skilled at forecasting so that you can anticipate and prevent inventory shortages before they occur. We can help you set up spreadsheets and generate dashboard reports so you’ll have better information for decision-making in this area of your business.

Develop Relationships

The more dependent your business is on a particular supplier, the more you want to develop that relationship. Adding that personal touch might not help you get your orders faster, but when troubleshooting is needed, you’ll enjoy the extra help that a personal relationship can provide.

Increase Communication and Collaboration

Increase communication with your suppliers so they can manage their own timelines and supply chains. Provide them with accurate forecasts and let them know how they can better meet your present and future needs. Remember, it’s within their best interests to serve you as best they can, too.

Audit Inventory Records Frequently

If your inventory balances are only adjusted once a year, inaccurate inventory numbers will likely cause problems. Instead, find ways to take inventory more often or, at the very least, increase the accuracy of inventory balances. The savings will be worth it; you’ll have fewer unexpected out-of-stock or back-order situations that could cost not only a loss in sales but customer loyalty.

Proactively Manage Shipping 

There may be times when paying rush charges on shipping is justified. Actively managing shipping and in-transit items will help you keep a handle on this. When possible, line up alternate shipping methods in the event that one method becomes unreliable. Alternate shipping methods are especially advised with overseas shipments where more can go wrong.

Create a Supply Chain Task Force

If supply chain issues are critical in your business and have cost you profits in the past, it might be time to create a dedicated team to manage and prevent crises. Consider putting together a group of employees who can be responsible for strengthening your supply chain.

Try these ideas to smooth out supply chain woes in your business.

Most large businesses have developed mission, vision, and values statements to help guide them and inform stakeholders about the company’s strategic direction. Going through this strategic exercise is a wonderful idea for even the smallest business as well.

A company’s mission statement lists its core purpose and desired impact for employees, customers, owners, and other stakeholders. A vision statement defines what the company wants to be. A values statement describes what the company stands for.

It’s a perfect activity for business owners to answer and remember why they built the business in the first place. It also serves to correct and re-align the trajectory of the business.

Mission Statement

Start by asking what impact you want your business to have on the outside world. Here are some mission statement examples that are frequently quoted:

• Harley-Davidson: More than building machines, we stand for the timeless pursuit of adventure. Freedom for the soul.
• Disney: The mission of The Walt Disney Company is to entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and innovative technologies that make ours the world’s premier entertainment company.
• Nike: Nike exists to bring inspiration and innovation to every athlete* in the world. Our purpose is to move the world forward through the power of sport – breaking barriers and building community to change the game for all. *If you have a body, you are an athlete.

Notice how each one is short and simple to understand. They focus more on the big-picture benefits they bring to customers and less on how they will get there.

To write your own mission statement, ask yourself what your business’s purpose is and how you will impact your customers’ lives with your products and services.

Vision Statement

A vision statement is big, bold, and futuristic. What do you want your company to be?

Here are a few examples:

• Harley-Davidson: Building our legend and leading our industry through innovation, evolution, and emotion
• Deloitte: We aspire to be the Standard of Excellence, the first choice of the most sought-after clients and talent.
• Amazon: Amazon strives to be Earth’s most customer-centric company, Earth’s best employer, and Earth’s safest place to work.

What do you want your company to become?  That’s your vision statement.

Values Statements

Values statements are typically a set of adjectives or statements that answer what the company stands for. They can be in the form of leadership principles, core values, or a similar format. These days, they often include values on environmental, social, climate, global, human rights, diversity and inclusion, sustainability, and many other current issues. They can take the form of additional strategic statements on each one of these issues.

Sample values statements can be found in the company’s annual report as well as the About or Company section of their website.

Here are some examples:

• Harley-Davidson Principles:
  • Communication – Communicate with purpose, structure, facts and inspiration
  • Agility – Accelerate, innovate and thrive in a rapidly changing environment
  • Impact – Focus on impact, not process, and be outcome driven
  • Simplicity – Pursue the simplest path to achieve each outcome
  • Speed – Don’t let perfection get in the way of process and pace
  • Culture – Be fair, honest, positive and creative. Strive to win and have fun.
  • Courage -Take risks and go against the norm
  • Judgment -Think strategically and make informed decisions
  • Focus – Focus on a short list of meaningful opportunities that build desirability
  • Lean – Maximize impact with limited resources

• Coca-Cola Behaviors We Focus on:
  • Curious
  • Empowered
  • Inclusive
  • Agile

• Merck Values:
  • Patients first
  • Respect for people
  • Ethics and integrity
  • Innovation and scientific excellence

Your mission, vision, and values statements will help you communicate the qualities of your business. It can help in hiring to see if a candidate’s individual values align with the core corporate values, and with customer acquisition when prospects see what your company is about. It can also help you remember your roots and why you work so hard every day.

We’d love to hear from you when you write up your mission, vision, and values statements.

When growing a business, it’s essential to consider every available opportunity to increase automation. Doing so frees up valuable time and, as a result, can increase profitability. One key area to increase profitability is accounts receivable. Collecting money from customers is a key function in any business, and the more automated this process is, the better. When collecting payments online, options are becoming increasingly available. Here are a few examples of what these methods might look like.

Your Website

You might initially assume that your website is the perfect place to collect payments from customers, but there’s one reason this might not always be the case: security. A typical website is not as secure as it needs to be to collect credit card information from customers. Almost always, you’ll need an additional application to obtain that security. Many web-building platforms allow you to connect to these apps seamlessly, but you can also implement a workaround if necessary. For example, you can direct customers to your website for payment and provide a link to a secure site (a shopping cart with a payment gateway) via a hyperlinked button. In both cases, you’re utilizing the necessary security protocols to protect you and your customers.

A Payment App

A payment system needs to handle three functions:

1. A shopping cart feature, in which an item is priced and can be added to a basket
2. A checkout page, where billing information and credit card information can be collected
3. A behind-the-scenes settlement function, where the money is taken from the customer, held in a merchant account, and then sent to your business

You need shopping cart software to handle the function in the first step. Standard retail solutions include Shopify, WooCommerce, and Magento, to name a few. But these won’t, by themselves, get you paid; they simply process the transaction in a secure environment.

The second step requires a payment gateway application. The most common stand-alone gateway is Authorize.net, and you would typically connect this to your shopping cart.

Your merchant account handles the third step, and sometimes, a separate processor is involved, too. From your merchant account, which is connected to your gateway, you typically get a reconciliation of the daily settlements that hit your bank account. You would also handle customer complaints and disputes with them.

Luckily, credit card companies like Stripe and Square have combined the second and third steps into their platforms in recent years. These platforms act as the gateway, the processor, and the merchant account for a streamlined process. Some vendors go a step further and combine all three functions into one vendor. PayPal is the quintessential example. Additionally, by using WooCommerce and WooCommerce Payments together, you can accomplish the goal of achieving an all-in-one solution.

Getting Paid in Service Businesses

A shopping cart is standard for online retail businesses, but what about service-based businesses? Service businesses that charge in advance can use a shopping cart just like retail.

If a service business bills its customers after the fact, the payment setup is connected to invoice distribution instead of a shopping cart. In this case, you would need to determine which solutions work with your specific billing system and if you’ll need an add-on application to extend your billing system’s capabilities. For example, QuickBooks users can sign up for QuickBooks payments which links your invoice to the customer payment to the bank deposit.

When the invoice is sent to the customer, it will include a payment link the customer can use to pay. These service business payment solutions are fairly industry-specific; for example, you might have noticed that medical offices often use different solutions than beauty care businesses.

Different Choices

When selecting a payment system for your business, you might think that credit card fees are the most important factor to consider. While that’s important, there are some additional considerations to keep in mind:

1. Strive to understand exactly what each apps’ capabilities are.
2. Applying for a merchant account is just like applying for a loan. In the past decade, this process has become highly streamlined.
3. Make sure the system allows you to pull the reports you need, like settlement details, refunds (full and partial) and void processing, failed payments and retries, and dispute resolution.
4. Establish processes to handle all of the items mentioned above.
5. Make sure the app you’re choosing can handle the type of billing you need it to, including cart items, recurring payments, after-the-fact invoicing, sales tax, and shipping parameters.
6. Find out how long it takes for payments to move from collection to bank deposit; this can range from 1-6 days, depending on the provider.
7. Watch for a high failure rate on customer transactions. If this is the case, it could be that the gateway and merchant account are rejecting perfectly good business because the merchant account’s acceptance rules are stringent. This can happen with merchant accounts tied directly to banks, and the best thing to do is avoid them and look for a different option.
8. Expect any new provider to hold the first few days of transactions for longer than usual. This is a temporary safety measure and should clear up quickly without action required on your part.

Adding an online payment system is a smart business decision and can save accounting time once you choose the best payment system for your specific needs.

While there are hundreds of accounting reports that can help you gain better insight into the financial health of your business, one of the most popular – but also most underutilized – is the variance report. A variance report helps you compare your actual performance with a past or expected performance. It makes crystal clear how far you’re straying from where you want to be and can therefore make it easier to course-correct earlier. 

Variance to Prior Periods

A standard variance report that almost anyone can generate compares current period results to prior period results. For example, you can generate an income statement with six columns:

1. Current month activity, such as March 1 to March 31, 2022
2. The same period of the prior year, such as March 1 to March 31, 2021
3. The variance between both months (column A minus column B)
4. Year-to-date activity, such as January 1 to March 31, 2022
5. Prior-year-to-date activity, such as January 1 to March 31, 2021
6. Year-to-date difference or variance (column D minus column E)

The variance allows you to see, at a glance, whether your sales or expenses have increased compared to last year. Seeing monthly variances is especially important if the business experiences seasonal fluctuations.

You can take your reporting one step further to explain the variances in an accounting process called account analysis. Take a look at the components of each number to see what caused the variance. Then, record your explanation in a notes section of your variance report.

You may not want to spend management time on the minor variances. To avoid this, a good financial dashboard, or simply an Excel spreadsheet, can help you color-code the balances that are more than 10 percent (or any percent you feel is material) off track.

Variance to Plan or Budget

You can also develop a variance report that compares current period results to the revenue and profit plan. Here, you would generate an income statement with these six columns:

1. Current month actual activity, such as March 1 to March 31, 2022
2. Revenue/Expense plan for the same period above
3. Month difference or variance or (over)/under (B minus A)
4. Year-to-date actual activity, such as January 1 to March 31, 2022
5. Year-to-date revenue/expense plan, such as January 1 to March 31, 2021
6. Year-to-date difference or variance or (over)/under (E minus D)

Do the same thing above, color-coding and explaining the variances using account analysis. How did your plan details differ from what actually happened? If it’s better, can you do more? If it’s worse, how can you get back on track? Performing a timely variance analysis helps you find either a) available opportunities to exploit for profit, or b) ways to get back on track faster so you don’t lose as much.

Of course, with revenue/expense plan versus actual variance reports, you do have to create the the plan first! If you’re not already receiving variance reports, would like help creating a revenue/expense and profit plan, or would simply like to set up a session to better understand variances, please feel free to reach out any time.

Is your business having trouble attracting and retaining team members amidst the Great Resignation? It’s not the only one. So far during the pandemic, the U.S. alone has seen over 33 million resignations take place. Anthony Klotz, the organizational psychologist and professor at Texas A&M University who coined the phrase “Great Resignation,” remarked that for workers, “It’s not just about getting another job, or leaving the workforce, it’s about taking control of your work and personal life, and making a big decision – resigning – to accomplish that. This is a moment of empowerment for workers, one that will continue well into [2022].”

A convergence of issues has created one of the greatest talent shortages in our lifetimes. With Baby Boomers retiring in large numbers, pandemic- and opioid-related deaths, low wages, limited or nonexistent access to child care, tighter immigration policies, and professionals reevaluating their life choices and priorities, it’s no wonder so many businesses are having trouble finding workers.

The good news is that small business owners can still implement strategies to retain and attract a strong team. Below, we outline four creative suggestions to consider:

1. Allow your employees the space to be human

American workers are demanding more from their employers, and leading businesses are listening and delivering. Beyond the usual benefit package of 401K, health insurance, vacation, and PTO, you may want to add on one or more meaningful perks like the five we’ve outlined below, which can improve work-life balance: 

1. Flex hours – consider keeping “core hours” that your team should be online or in the office for, but give them the flexibility to work at a time when they’re most productive, or have the greatest availability of time, outside of that window.
2. Work-from-home days – A hybrid work model is no longer the exception; more and more, it’s becoming the norm. Many people enjoy working from home, citing reasons like fewer distractions, greater comfort, and the ability to schedule home appointments without having to use precious PTO. 
3. Pet insurance – According to the ASPCA, pets cost their owners $700 to $1,100 on average each year. Pet insurance can be a great way to add value to employee compansiation packages while also demonstrating that you care about the things that are precious to your employees. 
4. Extra PTO – There’s a radical new movement happening in the workplace: unlimited vacation time. With this policy in place, your business is bound to stand out amongst competitors for top talent.
5. Child care – any way to make child care easier on caregivers is a plus. Childcare providers like KinderCare can help you establish an employer-sponsored child care policy. Watch your employees’ shoulders relax in real time when they hear about this one.

2. Make “fun” a vital part of your workplace

It’s a known fact that employees will stay in a role, even if they’re not thrilled about the work, so long as they feel supported by their managers and teammates. As the leader, it’s your job to set the tone at the top and establish a spirit of camaraderie. Consider bringing in breakfast once a week, scheduling a creative team-building exercise like an escape room, learn a new (non-work-related) skill together, or celebrating birthdays, workplace anniversaries, and employee wins. 

Other perks to think about are holiday gifts, bonuses, free dry cleaning, free car washes, and employee discounts. An unexpected moment that surprises and delights can go a long way.

3. Embrace technology

Employees will always benefit from a better tool for the job, and your bottom line will, too. Ask around to see where employees think processes could gain more efficiency or use a more robust software. They likely have a better handle on what will improve their workplace experience, so check in with your team once or twice a year to make sure they have the infrastructure they need.

4. Apply marketing techniques to hiring

Instead of posting a simple job ad, consider creating a marketing campaign to attract ideal employees. Make sure your social media is up to date and mirrors the culture of your organization. Create a job interview process that’s interesting and enthusiastic. You’re definitely competing for talent, so find ways to connect with your candidates and make them feel welcome and excited.

While the talent shortage isn’t going away just yet, there are still strategies you can implement to keep the talent you have and secure additional talent. More than ever, people are looking for two things: work that feels meaningful and companies that see them as human beings–not just workers.