Supplier and delivery disruptions may not dominate the headlines the way they once did during the pandemic, but many small businesses still face delays, higher costs, and unexpected shortages. Taking time to review your suppliers, inventory practices, and backup plans can help your business stay prepared when the next disruption occurs. Here are several practical strategies to strengthen your supply chain.

• Communicate with empathy. The worst thing you can do is clam up when customers start questioning orders or complaining about backlogs. Be upfront about the problems you’re facing.
• Underpromise and overdeliver. It’s better to lower expectations than it is to set a high bar that can’t be reached. Don’t make promises you can’t keep. Customers will be pleasantly surprised if you exceed your initial estimates.
• Be creative about pricing. If your production costs have significantly increased, it should be reflected in your pricing structure. But you can be creative. Consider alternative packaging sizes or combine products so the lower margin is hidden within the benefit of a larger sale. Consider stepping into the higher price or raise the price higher than needed and provide a periodic incentive to help provide better volumes for better purchasing terms.
• Diversify your suppliers. Even if you prefer one supplier, establish relationships with one or two alternatives so you have options if prices increase, inventory runs low, or shipping delays occur.
• Prioritize your most profitable products. If supplies become limited, focus your resources on the products or services that generate the greatest profit or are most important to your customers. This can help maintain cash flow while inventory remains constrained.
• Get you banks lined up. Have a good business banker can make all the difference. Have a line of credit ready to go, so if there is a great deal on a highly popular inventory item, you are ready to go with a purchase order.
• Review inventory regularly. Holding too little inventory can lead to missed sales, while holding too much ties up valuable cash. Regularly evaluate purchasing patterns, seasonal demand, and supplier reliability so you can maintain an inventory level that supports your business without over committing resources.
• Think outside the box. Try a different approach that may mitigate the shortages. For example, you might find a suitable and available replacement for a product component.

With the uncertainty of tariffs, as they were on, then they were off and now they’re on again, it only makes sense to be prepared. Please call if you’d like assistance.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.