Before starting any job, it’s important to gather the tools needed to complete the job ahead of time. Installing a sink, for example, isn’t possible without the correct sized wrench. With the wrong tools, the sink will not be installed at all or at least it will not be installed correctly. The same is true for business tools. Not having the correct tools for a business can cause the same kind of “leaks” as the improperly installed sink.
Re-Tooling Inventory Management
One of any company’s largest investments is their inventory itself. According to a recent small business report, 46% of small businesses with 11-500 employees don’t have an inventory management system. It makes good business sense to invest in a tool that will do more than just count how much stock is sitting on the shelf. According to an article from Entrepreneur, “Companies can increase their profitability 20-50% or more through careful inventory management.” That is 20-50% more profit just from managing inventory properly!
Inventory management systems nearly eliminate human error. For every one thousand keystrokes made by a person entering data, there are an average of 10 errors made. However, when using a barcode scanner, as part of an inventory management system, only one error is made for every 10,000 scans. There is just no competition between the two.
Another benefit is being able to forecast supply and demand. Knowing how much of one item is on the shelf and how quickly (or slowly) it historically sells for allows business owners to plan re-orders accordingly. Having just the right amount of a product in stock will help avoid write downs, write offs and depreciation as well as avoid having money tied up sitting in the stock room.
An inventory management system is also a tool that can assist in keeping customers happy. Knowing exactly what is in stock in real time will ensure that orders can be filled. Disappointing a customer by being out of the product they are trying to order will almost certainly send them to a competitor to purchase what they wanted. A lost sale is a lost opportunity and it will cost not just one sale but potentially a repeat customer.
Constructing Customer Relationships with CRM
Now that an inventory management tool has been set aside to use, it’s important to also find a tool that will manage customers and the relationship they have with your business. That relationship is what will keep them loyal to you and an important factor in growing your business.
Any business that hopes to grow knows that growth is linked to their customer’s positive experience. Installing a tool to manage that experience is an important step. A CRM, or customer relationship manager, tracks customer info from A-Z. It will organize any relevant customer information needed to do business. For example, where is the customer located, what have they purchased in the past, when is the last time you spoke and what was that conversation about? By having access to this data, communication with customers will become more efficient as well as more effective.
In the small business report mentioned earlier, 71% of business owners surveyed don’t currently have a CRM. That number is surprising with more than 44% of these small businesses reporting that they plan to grow by attracting new companies and customers. Investing in a CRM not only allows access to basic customer info but will also maximize financial opportunities. Other benefits include managing sales pipelines, sales reps as well as analyzing performance and business metrics.
Small business owners wear many hats every day. They don’t have the time and usually the resources to be on the leading edge of technology. That really isn’t necessary anyway. Investing in the right tools that will help manage critical areas of business will take some of those “many hats” away and do the job more efficiently and more cost effectively than the owner or even another employee can do.
Both CRM and Inventory Management are important to use to look ahead to the future. Predicting growth and customer needs will allow your business to stay one step ahead of any trends. Being trusted by customers for being dependable will not just grow your business with current customers but when word spreads, others will migrate to you and become loyal customers as well.
As a small business owner, not only do you have a business to build but also finances to track, employees to manage and of course building and retaining a client base. Adding the correct tools to your business owner toolbox, like inventory management and CRM is crucial. It will not only make sure the ability to take care of your customers and inventory is “installed” but installed correctly and without any leaks.Business & Finance Articles on Business 2 Community