Changing Operations in Response to Market Conditions
Today’s commercial world is brutal – any business that wants to move towards long-lasting success should know that the journey towards that point is not easy. You have to manage a lot of things and overcome quite a few hurdles: such as learning how to change your operations in response to market conditions.
The Covid-19 pandemic has taught us that this life and the world are unpredictable. Anything can happen at any time, and the only businesses that survive in the face of such fluctuations are those that are well-equipped to handle supply chain disruptions and quickly change their operations in response to the changing conditions of the market.
Needless to say, in this area, small businesses are likely to suffer the most. Because they have limited funds and reach to optimise their operations in response to market conditions, they may find that they are way behind their more established competitors. This is particularly problematic in consideration of the inflation crisis going on around the world – the price hike in almost every area of business is much more likely to impact small businesses, leaving them with insufficient resources to bring adaptability to the centre of their business operations.
Lack of Capital
Money makes the world go round and for small businesses, there is nothing that is truer than this. Small businesses usually start with little cash flow, which can prove to be quite a big challenge if you are trying to get up on your feet. After all, your cash flow is the blood of your business, and if you don’t have enough to get you going, it is unlikely that you will be able to move forward towards success.
Not only that, but any ways to counter the problem such as obtaining funding are also not easy for a small business/start up – especially if you are a 3PL. This is because you have to prove, beyond doubt, that your business has the potential to become successful and you are on track to making your customers happy. Bigger businesses have enough data to tip the scales in their favour, but a 3PL that is just starting out may struggle to get to that point.
It’s complicated; to be successful, you need money. To get money, you need to prove that you are already successful. It is a dual track that you have to dominate in order to get ahead, and the lack of capital will prove to be a hindrance to that.
Inadequate Administration
Administration consists of small, menial tasks that come together to form the basis of your business. Things like bookkeeping, payments, purchases, sales records – all the aspects that we don’t really sit down to think about are actually far more important than we consider them to be. For small businesses, they are even more important.
Yet, small businesses struggle with executing them properly. With limited resources and a smaller workforce, it is really hard to ensure that the administrative tasks are taken care of, and are seamlessly integrated into your business. This leads to an intentional neglect towards administrative tasks, which can manifest into bigger problems.
When you fail to deal with administration in an effective manner, what follows is chaos. For a small 3PL business, this is the worst case scenario. Not only do you have to actively ensure that there is top-level organisation through all the processes of the supply chain, but you also have to make sure that everything in other areas of your business is well-managed if you want to grow and be taken seriously by your customers.
Employee Retention
Another huge problem for 3PL small businesses is employee retention. Generally, employees gravitate towards workplaces that can offer them good financial compensation and growth. While some small businesses can do this quite easily, a lot of them can’t – at least for a short period after they launch.
This is problematic because it means you can’t really win the loyalty of your employees. They are likely to be on the lookout for better opportunities, and even if they don’t take up on them, you will be left worrying about the shortage of workers.
Essentially, this is a problem of employee retention. It is not limited to small businesses only – a lot of bigger businesses struggle with retaining employees as well. However, it is easier for bigger 3PLs to find replacements whereas it’s not as easy for small businesses to do this.
