What Businesses Should Consider When Faced with High Demand
Being in high demand is a great problem to have as a small business owner. However, make sure you have the systems in place to thrive during a sudden influx of orders.
You want to keep your current customers happy while going above and beyond for new ones. McKinsey researchers predict 2021 will be a year of transition for many businesses.
“More people are shopping online than ever before. Some estimates put the growth in digital shopping at five years ahead of where it was originally expected to be. ”
The plans you had in place prior to the pandemic may not work in the new digital economy. Even if your company is a brick-and-mortar establishment, you still must plan for technological changes and sudden spurts in demand as things open back up.
How can you prepare with sudden high demand for your products and services? Here are some ways to deal with rapid changes.
1. Define Your Goals
Rapid growth might blow right through the goals you set for the year. It’s important to revisit your plans for the future. You must know where you’re going in order to keep business flowing in.
Take the time to review objectives. If you set a too easily attainable goal, you may need to increase your expectations for future ones. Don’t be afraid to stretch a bit. If you don’t hit your objectives, you’ll still have gone further than you expected.
2. Find the Right Shipping Solutions
The past year was particularly lucrative for online sales, but e-commerce grows around 23% annually, and you can plan your budgets around anticipated growth in your sector.
Keep in mind customers are accustomed to the fast delivery services of companies like Amazon.com. They expect to order from you and get an immediate response and rapid shipping.
You must have a good logistics plan in place. Does your current provider help you scale up when you suddenly need to? What if you must scale back down? Ask the right questions now so when the demand hits you’ll know how to proceed.
Look for the best solution for your customers. How fast will the items get to them? Is the carrier careful with fragile objects? Take the time to research and talk to your shipping provider. You may even want to outsource much of the operation to a third party.
3. Analyze the Changes
When you have a spurt in growth, your company can have major growth pains. Ask yourself if the growth is sustainable or a one-time thing. Before you hire new employees, make sure you truly need them. You can always hire temporary or seasonal workers to meet spurts in demand.
What led to the sudden influx of orders? Is it a marketing method you’ll be able to repeat? Is your product in demand over time or only at certain times of year. Look at every angle and whether it’s worth investing in automation and staff or not.
4. Upgrade Your Technology
Improving your technology allows you to scale up easily. A customer relationship management (CRM) system lets you see what orders still need fulfilled. You can also reach out to long-time customers who may not have ordered. Don’t let your loyal patrons fall through the cracks during your periods of growth.
A loyal customer is worth far more than a one-time one. Ensure you take care of those who helped you grow to this point in your business. They’re the ones who will keep sending new leads your way and help you continue to profit.
5. Manage Cash Flow
According to Statista, small business owners have a positive outlook on cash flow now that we’re past the worst of the pandemic. Approximately 65% of entrepreneurs felt their cash flow would be good or very good over the next year.
When you have a sudden demand for your products or services, you might find the growth strains your cash flow. Software as a service (SaaS) and designer type business may particularly feel the strain.
You might create the product for the client and then wait on payment. In the meantime, you’ve paid your employees to do the work, paid your overhead and are still waiting on cash. Figure out how to build in payments throughout the work for SaaS and creative endeavors.
6. Control Costs
As you grow, your costs can mushroom out of control. The packaging you used when you filled 100 orders a day may be too costly to use for 1,000 orders daily. Look at every expense on your books. How can you cut back and where?
Talk to your employees about conserving water and energy. Have people gotten in the habit of leaving the lights on in the bathrooms? Cutting back on small costs and reducing your carbon footprint makes a difference when you have more employees to fill the higher demand. Install automatic lights that shut off when a room isn’t in use.
Look at all the services you pay for. Do you really need to have bottled water delivered every week or can you install a filter on the tap and let employees bring their own water bottles to fill? Talk to your vendors about where you can reduce payments. If you’re doing more volume, they should give you a better price.
Take a Deep Breath
It can seem a bit overwhelming when you’re suddenly faced with the demand of increased business. Take a breath and get organized. Look at all your processes and figure out how to adapt them today and the best ways to scale up when future growth hits.
If you still feel uncertain, talk to a business mentor who has built a successful company. Ask for advice on how to get through the growth spurts without losing your identity as a brand. Determination will see you through the ups and downs. Over time, your company will grow stronger. Enjoy the ride.