This guest blog is bought to us by Asha Hudson from Made By Hudson.
In the fast-paced world of e-commerce, effective inventory management is a critical aspect that can make or break your online business. Being able to manage your stock means you can meet customer demand, reduce carrying costs, and make sure your supply chain runs smoothly. In this blog post, we explore the key principles and best practices for e-commerce inventory management to help your e-commerce business succeed.
Understand your inventory
Before diving into inventory management, it’s essential to gain a clear understanding of your inventory. Categorise your products based on demand, profitability, and turnover rate. Analyse historical sales data to identify seasonal trends and popular products. This analysis will enable you to make informed decisions on stocking levels and plan for peak demand periods.
Dropshipping allows business owners to start selling products without the need for a physical inventory. When a customer places an order, you, the business owner, fulfil it directly from the manufacturer or supplier, who then ships the product directly to the customer. It is important to remember that you have limited control over the customer experience. If a customer receives a broken or incorrect product, they will look to you for answers, even though you didn’t handle the inventory.
First in, first out (FIFO)
FIFO means that the first products to arrive in your inventory are the first ones to be sent out – making it favourable to retailers selling goods with expiration dates or perishable items. It ensures that older inventory is sold first, reducing the risk of products expiring or becoming obsolete. It is important to note that if prices fluctuate often, it can lead to inflated profits due to differences between the cost of goods received and the cost of goods sold.
Adopt an inventory management system
To streamline your inventory processes and reduce human error, consider investing in a robust inventory management system. These systems offer real-time tracking of inventory levels, automated order processing, and analytics to support data-driven decisions. Choose a system that integrates seamlessly with your e-commerce platform and provides insights into sales, inventory turnover, and overall performance.
Implement the ABC analysis
The ABC analysis is a valuable inventory management technique that classifies products into three categories based on their contribution to revenue. Class A products represent high-value, low-frequency items. Class B products fall in the moderate category, while Class C products are low-value, high-frequency items. By understanding these classifications, you can prioritise inventory replenishment and allocate resources.
Set reorder points and safety stock
Determine the minimum stock level (reorder point) at which you need to replenish a product to avoid stock outs. Additionally, maintain a safety limit to account for unexpected fluctuations in demand or supplier delays. Calculating reorder points and safety stock levels helps maintain the balance between inventory availability and carrying costs.
Embrace demand forecasting
Accurate demand forecasting is indispensable for inventory management. Analyse historical data, market trends, and customer behaviour to predict future demand. By adopting demand forecasting techniques, you can ensure that you have the right products in stock when customers are ready to make a purchase, preventing stockouts and ensuring inventory turnover.
Employ just-in-time (JIT) inventory
JIT inventory management is a strategy that focuses on receiving goods only as they are needed, reducing excess inventory and storage costs. This method can be effective in minimising carrying costs and improving cash flow, but it requires strong supplier relationships and efficient logistics to avoid running out of stock.
Monitor inventory performance metrics
Constantly track key inventory performance metrics to gauge the effectiveness of your inventory management strategy. Key metrics include inventory turnover rate, days of inventory on hand, stock out rate, and carrying cost percentage. These metrics provide valuable insights and help you identify areas for improvement.
Efficient e-commerce inventory management is vital for sustaining a successful online business. By understanding your inventory, adopting the right tools and techniques, and continuously monitoring performance, you can optimise inventory levels, reduce costs, and enhance customer satisfaction. Implementing these best practices will not only streamline your operations but also lay the foundation for long-term growth and profitability in the competitive world of e-commerce.
We believe that managing stock is a key component of managing cashflow for an e-commerce business. We always advocate and recommend a well set-up system to help you manage your stock. A fully integrated stock management system to complement your beautifully designed and functional website (like the ones Asha creates) is a match made in heaven!
Book a discovery call with Asha Hudson from Made By Hudson.
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In today’s fast-paced business environment, change is inevitable. Whether it’s adapting to new technologies, market trends, or organisational structures, businesses must embrace change to stay competitive and thrive. However, managing and implementing change can be a daunting task. That’s where effective change management strategies come into play. In this article, we’ll explore five strategies businesses can use to navigate the choppy waters of change without getting overwhelmed by the waves.
Why Care about Change Management?
Change management is crucial for businesses because it provides a structured approach to effectively navigating the complexities of change. In today’s rapidly evolving business landscape, organisations face various external and internal factors that necessitate adaptation and transformation. By implementing change management strategies, businesses can minimise resistance, enhance employee engagement, and ensure a smooth transition to new processes, systems, or strategies. Change management promotes clarity, open communication, and a shared understanding, enabling employees to embrace the change confidently and enthusiastically. Moreover, it helps businesses maintain a competitive edge by fostering innovation, agility, and resilience. By proactively managing change, businesses can navigate uncertainties, capitalise on opportunities, and achieve sustainable growth in an ever-changing marketplace.
Strategies for Effective Change Management
Clear and transparent communication is one of the most critical aspects of successful change management. Employees must understand why change is necessary, how it will affect them, and their role. By providing open lines of communication, such as team meetings, regular updates, and feedback channels, businesses can create a sense of trust and inclusion. This alleviates fears and uncertainty and encourages employees to actively participate in the change process.
Engage and Empower Employees
Change should never be a top-down directive. Businesses need to involve employees in decision-making to foster a positive change culture. Engage them by seeking their input, ideas, and concerns. Businesses tap into their expertise by empowering employees to take ownership of the change and create a sense of shared responsibility. This approach boosts morale and ensures that change initiatives are more likely to succeed, as employees feel invested in the outcome.
One way to engage employees is to make one a champion for the new technology or process being implemented.
Training and Development
Change often brings new systems, processes, or working methods. To ensure a smooth transition, businesses must provide adequate training and development opportunities to equip employees with the necessary skills and knowledge. By offering comprehensive training programs, workshops, or coaching sessions, employees can upskill and adapt to the changing requirements. This boosts their confidence and productivity, resulting in a smoother change implementation.
Celebrate Small Wins
Change can be overwhelming, especially when the end goal seems far away. Businesses should celebrate small wins along the way to keep the momentum going. Recognise and acknowledge the efforts and achievements of individuals or teams who have successfully embraced the change. This boosts morale and motivation and reinforces the idea that change is achievable and worthwhile. By breaking down the change journey into smaller milestones, businesses create a sense of progress and excitement, making the overall process more manageable.
Continuous Evaluation and Adaptation
Change is a dynamic process that requires ongoing evaluation and adaptation. Businesses should regularly review and assess their progress to ensure the effectiveness of change initiatives. Collect feedback from employees, monitor key performance indicators, and analyse the impact of the change on the overall business objectives. By staying agile and responsive, businesses can identify potential roadblocks or areas of improvement and make necessary adjustments. This increases the chances of success and demonstrates the commitment to continuous improvement and learning.
Change can be a bumpy ride, but with the right strategies, businesses can navigate the waters of change management effectively. Clear communication, employee engagement, training and development, celebrating small wins, and continuous evaluation are vital for successful change implementation. By embracing change as an opportunity for growth and improvement, businesses can stay agile, adapt to new challenges, and build a resilient future. So, if you find your business facing the winds of change, don’t fret.
Embrace it, plan for it, and implement these strategies to ride the waves confidently. Change may be challenging but can lead to exciting opportunities and sustainable growth. Let’s navigate the sea of change together and sail towards a brighter future!
Effective cash flow management is a critical aspect of running a successful business. Maintaining a healthy balance between incoming and outgoing cash can ensure financial stability and provide growth opportunities. In this article, we’ll explore essential tips to help you master cash flow management and optimise your business’s financial success.
Why is Cash Flow Management Important?
But firstly. Why is cash flow management so important?
We could tell you all the well-known sayings…
- Cash is king
- Cash is the lifeblood of business
- Turnover is Vanity, Profit is Sanity, but Cash is Reality
Regardless of any of the sayings about the importance of cash flow, the simple fact is without mastering your cash flow management; your business has a higher chance of failure. Research from The Australian Securities and Investment Commission (ASIC) states that poor cash flow is cited as a factor in 40% of business failures. Many of these failures could have been prevented through effective cash flow management.
Tips for Mastering Cash Flow
Track and Analyse Your Cash Flow
To gain control over your cash flow, start by meticulously tracking and analysing your income and expenses. Regularly review your financial statements (profit and loss, balance sheet, and cash flow statement) to understand where your money comes from and how it’s being spent.
Create a Cash Flow Forecast
A cash flow forecast allows you to anticipate future cash inflows and outflows. You can plan and make informed decisions by projecting your expected cash position. Identify potential cash shortfalls or surpluses in advance, enabling you to take necessary actions to prevent financial setbacks.
Optimise Accounts Receivable
Streamline your accounts receivable process to ensure timely payment from customers. Establish clear payment terms, send out invoices promptly, and implement a system for tracking and following up on outstanding payments.
Refer to our previous article for our top tips for collecting overdue invoices.
Control and Reduce Expenses
Regularly review your business expenses to identify areas where you can reduce costs without compromising quality. Negotiate better pricing with suppliers, consider alternative vendors, and eliminate unnecessary expenditures. Small savings can accumulate over time and positively impact your cash flow.
Recently we assisted a client with a review of their suppliers, resulting in a 35% saving on their material costs.
Establish Cash Flow Reserves
Building a cash reserve or emergency fund is a financial safety net during unforeseen circumstances. Set aside some of your profits to buffer against unexpected expenses or revenue fluctuations. Having cash reserves provides peace of mind and allows you to seize growth opportunities when they arise.
Optimise Inventory Management
Managing inventory levels is crucial for maintaining a healthy cash flow. Refrain from overstocking items that tie up your funds and can become obsolete. Conversely, ensure you have sufficient stock to meet customer demand and prevent lost sales. Implement inventory tracking systems to optimise your stock levels.
Explore Financing Options
Consider exploring various financing options during cash flow gaps or growth opportunities. Lines of credit, business loans, or invoice factoring can provide additional working capital when required.
Mastering cash flow management is essential for the long-term success of any business. You can ensure a steady and sustainable cash flow by diligently tracking cash flow and managing your working capital.
Remember, cash flow management requires consistent monitoring, analysis, and adjustments. By implementing these strategies, you’ll be well-equipped to navigate financial challenges, seize opportunities, and achieve financial stability and growth for your business.
If you need expert guidance and assistance in managing your cash flow effectively, we are here to help. Contact us today to take control of your business’s financial future.
Let’s delve into the fascinating concept of the compound effect and its profound impact on business. It’s like adding a drop of water to a bucket every day, eventually filling it to the brim. So, sit back, relax, and explore the power of consistent small changes that can yield remarkable outcomes over time.
Understanding the Compound Effect
Let’s start with a simple maths equation: 1.01365 = 37.8. Why this equation, and what does it mean?
If you make a 1% improvement every day for 365 days, it will be 37 times better by the end of the year.
That’s like transforming a modest business into a thriving one with substantial and sustainable growth. It’s truly remarkable how those incremental improvements can accumulate and lead to astonishing results. Whether it’s refining processes, enhancing customer service, or optimising products, embracing the compound effect can be your secret weapon for success.
Avoiding the Negative Side of the Equation
Let’s not forget the other side of the equation: 0.99365 = 0.3
If we make something 1% worse every day for a year, we make it 97% worse. This highlights the importance of consistently making positive changes in our businesses and avoiding the pitfall of complacency.
Strategies to Harness the Compound Effect
Now, let’s explore how you can harness the power of the compound effect to drive growth and success in your business. Here are a few practical ideas to consider:
Embrace the mindset of continuous improvement
Adopt a philosophy of ongoing enhancement. Also, encourage your team to identify small, actionable steps they can take daily to improve their work and contribute to the business’s overall success. Remember, even the tiniest improvements can lead to significant breakthroughs.
Monitor and measure progress
Keep a close eye on key metrics and indicators that matter to your business. By regularly tracking performance, you can identify areas for improvement and make minor adjustments along the way. This ensures you stay on course and make progress towards your goals.
You can download our Know Your Numbers Workbook if you are stuck for suggestions on what metrics you can track.
Cultivate healthy habits
Consistency is vital regarding the compound effect. Also, encourage your team to develop positive habits that align with your business objectives. Whether it’s setting aside time each day for skill-building or establishing a routine for customer outreach, these small habits can have a cumulative impact on your business’s success.
If you need help to be consistent with your new habits, we recommend trying habit stacking. In his book Atomic Habits, James Clear outlines habit stacking as identifying a current habit you already do each day and then stacking your new behaviour.
The business landscape is ever-evolving, and adapting to new opportunities and challenges is crucial. Encourage your team to stay open-minded and embrace change. By making minor adjustments in response to market shifts or customer feedback, you can stay ahead of the curve and position your business for long-term success.
Remember, the compound effect is like a domino effect – small actions can create a chain reaction of positive outcomes. So, seize the opportunity to make those incremental improvements daily and witness how they transform your business into a remarkable success story. Cheers to the power of the compound effect!
Example of Implementation
One of the most successful examples of The Compound Effect I have ever heard of is the British Cycle Team. Rewriting their history books from 1 gold medal in 76 years in 2002 to winning 7 out of 10 available medals at the Beijing Olympics, marginal gains are what got them there. Have a read of an interview Harvard Business Review did with Sir Dave Brailsford.
Not sure where to start with 1% changes in your business?
Book a discovery call, and let’s start the journey to 37 times better today!
This guest blog is bought to us by Meredith Nowlan from The Regional OBM.
Are you ready to take your business to the next level and know that you need a hand to do it? Perhaps you’ve just signed up with a business coach or a virtual CFO and they’ve given you an action list that’s as overwhelming as it is invigorating. Well, I’ve got some great news for you. I’m going to dive into the wonderful world of Online Business Managers (OBMs) and how having one can positively impact your business. So grab a cup of coffee, sit back, and let’s explore how an OBM can work wonders for your business.
Streamlined Operations and Processes
Picture this: you’re running your business and it’s gaining momentum. It’s freaking amazing, but sometimes the day-to-day operations can get a little stressful/time-consuming/all-encompassing (insert your own experience here!).
Enter the OBM, your wing woman in business. These magical beings specialise in optimising and streamlining your business operations and processes. From creating efficient workflows to implementing systems that make your life easier, an OBM will have your business running like a well-oiled machine.
Strategic Planning and Goal Setting
Remember the coach or new CFO I mentioned earlier? They’ve clued into the fact that you’ve got big dreams and even bigger goals. Sometimes, it can be challenging to turn those dreams into reality, even with the awesome assistance they’re giving you. That’s where an OBM comes in. Share your goals with her and every plan that she makes will help you navigate towards the desired end result. Your regular catch up’s will turn into brainstorming sessions on the best way forward – and she’ll love it just as much as you do.
Delegating and Managing Teams
As a small business owner, you wear many hats. And there are days where trying to juggle all the tasks can leave you feeling like a one-person circus act. So don’t let fear hold you back! An OBM is here to protect your sanity. They’re masters at delegating and managing teams. They’ll help you build a dream team of talented individuals and ensure everyone has the tools they need to work seamlessly. This particular OBM is not afraid to employ tech stacks where necessary – automagic is just a few key strokes away! With an OBM on your side, you can focus on what you love and let them handle the rest.
My tip – a project management system such as Trello, ClickUp and Asana can really make an impact on getting started with the first 3 topics!
Enhanced Customer Experience and Satisfaction
Having a kickass customer journey and customer service can be the difference between you and your competition. Happy customers mean repeat business and positive word-of-mouth, and that’s pure gold. This process should be a well-oil machine that cranks every single time – no matter which team member picks up the order or how many after-school activities you are actively ubering this week. An OBM can work with you to implement customer-centric strategies and processes that will leave your customers smiling from ear to ear.
Dubsado is the client relationship management system I utilise inside my own business and recommend most to my clients!
Time and Stress Management
I get it. Running a business can feel like a never-ending rollercoaster ride, especially when you throw in family and community responsibilities (or just trying to get to the pub for dinner on Friday night to remind friends you still live). It’s exhilarating, but it can also be exhausting. An OBM is like your personal time and stress management guru. They’ll help you reclaim your precious time and alleviate stress by handling operational tasks. So take a deep breath, relax, and enjoy a better work-life balance. You deserve it!
When an OBM is not for you
If you aren’t ready to implement change, hand over partial control of the reins or really don’t want suggestions on how to improve your systems, communication and automations… then what I’d suggest is looking into a Virtual Assistant (VA). VA’s are more than happy to follow a set checklist to help you manage the day-to-day. Whilst many of them are happy to think outside the box, they understand that it’s not what they’re here for and will gladly follow your lead. There’s nothing wrong with being at this stage – so long as you aren’t sitting stagnant out of fear of what could come next!
How to start with an OBM
If you are wondering how to start with an OBM, the first step is booking a discovery call! In this first session, we’ll chat about what’s going well in your business and where you are struggling with keeping up, maintaining control and what systems need a good tightening. Understanding what systems and software you’ve in place already gives me a great idea of where you need to head next to achieve the vision you have for your business.
An OBM is a game-changer, offering streamlined operations, strategic planning, team management, automation wizardry, enhanced customer experiences, and stress relief. So why wait? Embrace the benefits bringing on OBM onboard will bring – you won’t look back!
Meredith Nowlan is a Systems Strategist and Online Business Manager with extensive experience in the logistics, mining and transport industries. She’s worked in almost every role an office could have and considers herself the ultimate wing woman in the business world. From kickstarting your Dubsado setup to creating streamlined systems and automations across various apps, Meredith has your back when it comes to sprinkling auto-magic over your business. Based in FNQ, Meredith works remotely with business owners from all around Australia (some from their caravans!) to ensure their businesses run like a well-oiled, efficient machine that frees up your time and skyrockets your success.
Book a discovery call with Meredith Nowlan from The Regional OBM, or connect with her on LinkedIn.
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