Outsourcing Your Inventory
Management And Order Fulfillment To Third Party Logistics (3PL) Companies.
1. The term logistics can be ambiguous. Therefore, search the market and find the 3PL providers that currently provide similar services for other businesses with the same criteria as yours.
2. If you are a small-business owner and doing the receiving, storing, order taking, packaging and shipping, take the time to evaluate outsourcing to a 3PL. Many times small-business owners do not realize they do not have to be big to work with a 3PL.
3. Weighing the cost vs. benefit of outsourcing to a 3PL is simple. Measure the value of your time spent on inventory management and order fulfillment against time available to devote to sales and marketing.
4. For businesses that have seasonal requirements, 3PLs eliminate the “ramp up” problem, the real estate requirement—only to become a vacancy situation in down time—and consistently having to retrain personnel.
5. 3PLs normally will have a sophisticated warehouse management system that will provide the business owner a multitude of inventory information and reports. Most 3PLs will always be knowledgeable on the most efficient and cost-effective shipping available.
6. When evaluating 3PLs, obtain their policy, if any, on inventory negligence, miss-ships, shrinkage, and deadline for accepting orders to ship same day.
—Dale Oestreich, president, ADS Logistics
Ten Commandments
Of Networking
If the thought of “Networking” at business functions turns your stomach in knots—then you’re not alone!
Networking doesn’t have to be traumatic. With the right approach, you can use it to build a wealth of resources and opportunities.
Remember these Ten Commandments of Networking before your next business gathering:
1. Have tools to network with you—business cards, name tag and brochures.
2. Set a goal for the number of people you’ll meet—don’t leave until you’ve met your goal.
3. Act like a host not a guest—volunteer to greet people or act as a conduit.
4. Listen and ask questions—a good networker has two ears and one mouth, use them proportionally.
5. Don’t try to close a deal—networking is about developing relationships, meeting people at events is the beginning of the process, not the end.
6. Give leads or referrals wherever possible—giver’s gain!
7. Exchange business cards—ask for two, one to keep and one to share.
8. Manage your time effectively—spend 10 minutes maximum with each person you meet, practice your get-away phrases, and don’t linger with associates and friends.
9. Write notes on the backs of business cards collected—record interesting things that will help you remember them.
10. Follow up—you can do the first nine perfectly, but without effective follow through, you will have wasted your time.
—Scott T. Simon, executive director, Business Network International (BNI)
Website Updates
Small businesses need a website to stay competitive in the market, just like larger companies. The biggest problem with most websites is that they are out of date. The content on your site must be kept current to keep your customers informed of the latest services or product offerings. Some small businesses don’t have the luxury of having in-house IT staff to update their site. Because of the advancement in web technology, it is easy for a small business to maintain its website with a web content management system. Most content management systems utilize an editor similar to your standard word processor, which eliminates the need for technical assistance. Some more advanced systems don’t require any special software to be installed on your PC. An Internet connection and a web browser will allow you to update your site.
Look for an Internet consulting partner that will design, implement and train you on using a web content management system.
—Devin Sanson, THINK GLOBALe, LLC
Increase Customer Satisfaction
The employment specialists at Workforce Development, now known as Missouri Career Center of Saint Louis County, have found the following “tips” to be effective in increasing customer’s or client’s satisfaction levels.
H—First, take the time to listen and Hear customers’ concerns about their issues. Experience has shown time and time again that customers often feel agitated about things that they don’t understand. If you take the time to listen, it might help you to be able to explain the perceived problem, from the customer’s perspective.
E—Empathize by showing sincere concern through good body language and a positive tone in your voice, as you respond to the customer’s concerns.
L—Actively Look for a solution. Don’t brush off the customer with apathy or indifference. Provide options to the customer that can help solve his problem, or alleviate his concerns.
P—Provide a solution and take responsibility for the customer’s concerns. Remember, the customer would rather be focusing on his business instead of seeking solutions to his concerns. Help customers get back to their jobs by doing your job!
—Delrena Foster, workforce development specialist St. Louis County Department of Human Services Missouri Career Center of Saint Louis County
Choosing A Shredding Service
1. Have your legal counsel review the shredding service agreement and certificate of destruction BEFORE signing the agreement. Many of the agreements and certificates leave the liability with the business, not the shredding company, and allow for shredding to be performed on-site or off-site without further notification.
2. If the shredding is off-site, when does the shredding company assume liability? It should be when the material is picked up to take to the off-site facility.
3. Request a certificate of insurance naming your company as an additional insured.
4. Ask if a third party performs background checks including criminal, driving, and credit; and what criteria must the applicant pass in order to be hired—such as no late payments or bankruptcy in order to be hired. The fact that the company does perform the check does not guarantee that they are not hiring individuals with bad credit or a poor driving history.
5. Ask for an on-site shredding demonstration. Verify the back of the truck is empty and request and verify that the items are shredded at the truck’s fastest shred speed. Inspect the size of the shredded materials upon completion. The materials should be the size of the thumbnail in width. Typically, the faster the shred the larger the shredded paper—sometimes a full sheet of paper will be in four to six pieces, certainly too large to be considered confidential.
—Cindy Brown, Shred-it
Choosing A Business Service
When considering any kind of business service, ask the potential provider:
1. How long have you been in business?
2. Can you give me references, i.e. companies that have used your service.
3. Do you have a guarantee?
4. Give me an example of someone who purchased your service and wasn’t happy. Why were they dissatisfied?
5. If I decide to do business with your company, who will be my contact and for my account?
6. What does your service cost? Are there going to be any add-ons? Do you offer any discounts? Do you have a menu of services offered?
7. Do you offer a trial period?
8. What are your credentials? Why your kind of service? Why you and not your competition? Why now?
—Fred E. Miller, president, Business Research Bureau
Leasing Office Furniture
In addition to outright purchase, rental or leasing programs are often overlooked as many people do not really understand why to use them.
Renting helps you achieve fast solutions to short-term and urgent office furniture needs by helping conserve capital and giving you more flexibility.
Leasing works for any type of business—Every imaginable type of business and/or organization throughout the world leases equipment or furniture. Over 80% of American businesses lease some of their equipment and nearly 90% say they would choose to lease again.
Make better use of capital—Conventional bank loans usually require more money upfront than leasing and often have restrictive covenants. Banks usually will require a 10%-20% down payment. Leasing generally requires only one or two payments upfront, which are applied to future payments.
Finance 100% of costs—In most cases, the full amount of the equipment or furniture, as well as the shipping and installation and maintenance costs can be included in the lease. This spreads the payments out evenly over the term of the lease and frees up working capital for other areas.
Tailor a solution to meet needs—Leasing is flexible. Customize the length of time and the amount of the monthly payments to meet desired business needs.
Tax advantages—Depending on the structure of the lease, the entire monthly payment including interest may be written off as a deduction for the whole term.
Protect credit lines—Bank credit lines remain intact for other needs.
—Deron Mann, Westport Office Furniture
Choosing Computers
For Your Business
When purchasing new computer technology remember that buying a computer is just like buying a company car. Your business might need the computer equivalent of a panel van, SUV or even an 18-wheeler, while some can get away with a little Yugo. Decide first your needs and the machine to satisfy them. Then work backward to decide the performance, cost to use and longevity you will require. Your data is the real asset, not the equipment, protect it with appropriate protection and backups. As with most things in life, you definitely get what you pay for in computing.
—Joe Balsarotti, Software To Go
Sales Tips
1. Don’t talk so much in a sales conversation. Selling is asking not telling. Have a series of open-ended questions prepared so that you can guide the conversation and help prospects reveal their needs in a comfortable interactive process. Prospects like to talk about themselves. Make it easy for them to talk and for you to listen!
2. Don’t repeat an objection or negative. If the prospect says “your price is too high,” don’t begin your response with “our price isn’t too high because…” Repeating the negative just reinforces it in the prospect’s mind. Instead, restate the objection positively. “I can appreciate that price will be part of your consideration, let me ask you…what type of budget are you considering for this project?” or “Other than price, what else is important to you as you evaluate how this product or service will solve your problem of ______?”
3. Don’t let prospects own the next point of contact in the sales cycle. Even if you are sending the prospect information to review, don’t settle for them saying “I’ll get back to you as soon as I read it through,” or “I’ll call you in a couple of weeks.” Instead, ask “Do you think you’ll have time to review the information this week?” or “When will you complete this review?” or “When are you all meeting to discuss this?” Then say, “Great, I’ll give you a call on _(day after), is morning or afternoon a better time for you?” Put your callback date on your calendar or activities report for that date and keep the date. Even if they are not there at the appointed time, it shows that you are reliable and keep your promises! People want to do business with people who keep promises and can be counted on to deliver!
—Sam Black, Sam Black Consulting
Choosing Outside Tech Support
Even the most exceptional IT staff does not alone possess all the skills required to manage an entire technology infrastructure—from hardware to networking to operating systems, software applications and Internet connections. The truth is that most companies will, at some point, need to hire a third-party service provider. Following are a few suggestions of what to consider when seeking an external IT services provider:
* Choose a service provider that possesses good knowledge and experience with companies like yours. It is essential that they understand your business, the operational pressures that you face, and what you want to achieve.
* Decide which services you require—telephone support, remote diagnostic, or on-site service. Many third-party support services offer these options in “bundles,” determined by your company’s needs.
* Evaluate providers that guarantee security, confidentiality and high availability.
—Courtney Watson, Brad Cooper, Mark Locheed, Kyvon
Choosing A Web Development Provider
There are a lot of pitfalls to avoid when choosing a web development provider. By far the most costly to the client is not reading the fine print in the web developer’s contract. Why? Because some web development providers have wording in their development contracts that allows them to retain the rights to the client’s web site after it is built. In addition, they’ll often retain rights to the URL as well. That means the client doesn’t own the website or the URL he or she has paid for—the web development provider does. And if at some point in the future the client wants to change web development or hosting providers, they’ll be forced to buy the rights to the website code and the URL, often for a substantial amount of money. So before you contract a web development provider to build your website, make sure you will own the rights to the site and the URL at the end of the project. If you’re unsure after reviewing the contract, just ask the company if it will provide a CD with all of your files on it when the project is completed. If the company will not, don’t contract with them.
—Don Barnes, president, PeaceFrog Production
Archiving Your Files Can
Save Space, Time And Money!
Many file drawers get cram-packed, year after year, with stale documents and old files that will never be retrieved again. The problem is not solved by purchasing new file cabinets that take up valuable floor space. It is solved by an annual clean-sweep of file cabinets, which can produce items once thought lost forever.
Tips for a clean-out file day:
* Use storage boxes that are made to stack easily—not too large, they can get heavy.
* Pull all year-end documents that need to be retained for tax purposes.
* Pull all documents—such as old correspondence, marketing campaigns, meeting minutes, etc.—that are no longer active.
* Purge and discard all documents or files that are no longer needed and do not need to be retained.
* Keep a log of all archived information for easy access.
—Cathy Sexton, CSBS, LLC— The Productivity Experts!
Marketing Tips
Gain more leads without increasing your marketing budget. There are many low-cost methods of attracting potential customers’ attention with direct mail. The tried and true method of mailing a “bulky” package with a premium inside still works. However, in order to make your offer really stand out, think about the way in which your package is delivered. Overnight services, such as FedEx, DHL, UPS, will make your customers sit up and take notice, but one other more inexpensive method to consider is certified mail. If you narrow your target list to a highly targeted, smaller database—or “wish list”—you can increase response rates, and at the same time lower your lead cost.
Research your “Wish List.” The more time spent on a list, the more likely you will get the response you are looking for. Purchase lists from associations or lists of known respondents to direct mail. These highly targeted lists—we call them “wish lists”— should include only those companies or individuals with whom you would really want to do business.
Join a trade association and ask for referrals. People buy from people they know, like and trust. Utilize personal relationships within the association to build a personal database and gain referrals.
—Diane Carson, co-owner, Marketing Xperience LLC
Researching And Working
With Professionals
I have noticed over the last few years that purchasers of our services have become much more informed as a primary result of information available on the Internet. Often clients come to us for confirmation of their research and end up doing much of the work themselves. This allows them to spend their allocated budget for professional services with us in more meaningful areas as opposed to helping them with easy tasks such as obtaining federal identification numbers for new entities. The result of some of the self-help projects can end up being damaging if they obtain just enough information to be dangerous and do not seek professional help when it is needed. This applies to many types of business services. I encourage people to obtain as much information as possible about whatever project they are working on, but be careful to recognize when they should supplement with professional help for projects where there are significant risks.
—Philip G. Brumbaugh , Philip G. Brumbaugh CPA, CVA
Artwork—Random Thoughts
If artwork is in any way a part of your project, the following apply:
* Microsoft Word is not an art program
* Resolution (dots per inch—dpi) used for the web is not the same as resolution used for print. Typically, web art is at 72 dpi and print art is at 300 dpi.
* You cannot take a 72 dpi image designed for the web and magically turn it into a beautiful 300 dpi image ready for print. All you end up with is a larger file, and when printed, it looks just like it would if you had just printed the 72 dpi image—jaggy, dotty and blurry.
—Bob Gleason, owner, IMAGITRAX
Working With Your Advisors
Communication is a basic key to every relationship, but one relationship often overlooked is the consistent communication with your team of trusted advisors. Periodic meetings with your CPA, banker, attorney and insurance agent should be scheduled regularly to discuss your evolving needs and is a perfect forum for an exchange of proactive ideas specifically adapted for you. Provide an agenda prior to the meeting to ensure your specific needs are met in an organized manner while also leaving time available for their developmental ideas and a summary of what accomplishments your advisors have assisted you with since your last meeting. This agenda not only provides a checklist of topics, but also assists in keeping the meeting flowing, minimizing costly unproductive time.
Like physicals with your doctor, keeping your advisors informed will help insure your financial well-being.
—Teresa Godar, CPA, MPP&W, P.C.
Selecting An ISP
There are many options today for corporate Internet connectivity. Traditional services include dial up, ISDN, DSL, and T-1. Wireless, cable, fiber-based products and now Broadband over Power Line (BPL) are starting to take shape in our area as well. The speed required or desired is the first thing a business owner must establish. Most ISPs will help with this analysis. Then you need to determine which type of transport makes sense. Ask for customer references to determine the ISP service level and customer satisfaction before just agreeing to the contract and the service they recommend….
—Trey Goede, executive vice president, Primary Network/RiverCity Internet Group
Choosing Outside Professionals
Always check references of any outside professionals you are considering retaining. Ask the references that are provided if they know of someone else who has done business with the service provider, which will offer a second tier of information.
In hiring employees or retaining independent contractors, make sure there is good chemistry between the parties. If the relationship isn’t working out, end it sooner, not later. It won’t get better and will probably affect the entire organization.
Make sure service providers have the experience and skills you need, have worked with small businesses and understand entrepreneurs, i.e. don’t hire a divorce lawyer for a real estate deal. Financing growth may be accomplished by linking several funding sources, not just using a single entity. Make sure the necessary infrastructure is in place in the organization to support any growth plans.
—Ginni Campbell, Campbell Consulting Group
Why Outsource Security?
Network security is a moving target. Keeping staff trained and aware of network security issues is costly. It is not a part-time job!
By outsourcing security, you take advantage of a security professional’s vast knowledge and experience—or even a team of network security professional’s capabilities for a low monthly fee. This improves uptime and performance and limits liability.
—Suzanne Magee Joyce, president, TechGuard Security, LLC
Choosing A Backup Solution
When choosing a backup solution for your business critical computer data, remember that what you buy is every bit as important as the data that you are trying to protect. Think of backups as your insurance policy against the loss of your data. Ask yourself how much you can afford to lose. And then ask your service provider to provide you with a solution that meets those needs.
—Paul Swarthout, president, Antidote Computer Services, Inc.,
Inventory Control System
If you do not have an inventory control system within your company, you can still make sure you have invoices, checks, envelopes and letterhead when you need them. Figure out how much of a particular item you use in a two-week period…let’s say it’s one carton. If you ordered 10 cartons of that item, then open up the last carton when you receive your order. On top of the stack in that carton, place a note on top that reads, “REORDER NOW.” If this still doesn’t keep you from running out of forms, have your manufacturer hold a carton back so when you call in a panic he can ship over the last carton while he reprints your order.
—Tim Nenninger, sales manager, Bernadette Business Forms, Inc.
Purchasing Printer Cartridges
When you purchase printer cartridges from anyone, make sure the entity from which you purchase has a published return policy for defectives.
—Sue Harrison, owner, InkForYourPrinter.com
Warehousing, Shipping
And Inventory
If your business currently operates its own warehouse, do a realistic cost analysis on your expenses. The obvious factors would include rent-payment, salaries and benefits, equipment, building insurance, maintenance and utilities. Intangible costs should also merit consideration.
Using a third-party warehouse provider, your expenses will be based on the amount of space and activity used by you on a “monthly” basis. Therefore, if your business experiences a slow period, your overhead will decrease proportionately. Your provider can assist you with your choices of transportation, freight-claim documentation and inspections, physical inventories and assistance with the elimination of any obsolete inventory.
When selecting a third-party provider, ask for customer and financial references, length of time in business, verification of insurance coverage and inbound and outbound procedures. By using an outside provider, the distractions and interruptions you and your staff experience with warehouse and shipping issues on a daily basis will be eliminated.
—Dave Nausley, Park Warehouse Service
Carnival of Entrepreneurs: # 20 has chosen this article as one of its “best of the week” (April 25th) picks. You can see it and many other wonderful, inspiring and informational articles at Atlantic Canada’s Small Business Blog: IQI Strategic Management.
Working at Home Blog Carnival-Thirty-first Edition has chosen this article as one of its “best of the week” (May 3rd) picks. You can see a plethora of great articles from many awesome bloggers at Working at Home on the Internet.
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