Last night I had the privilege of speaking on a panel of food and beverage entrepreneurs for McCombs School of Business students at 512 Brewing. One of the interesting things that came up was that the biggest struggle for many of the business owners was keeping up with demand, and with that the fear of letting their customer down. So, how does a small, growing business keep up with demand?
Here are a few tips from what I have learned along the way that have helped us meet the ever-growing demand:
Hire slow, fire fast
We haven’t been so good on the firing fast, but in the future we certainly won’t hesitate to send a bad apple out the front door. Hiring slow is extremely important because it ensures you get a quality team member. The last thing you want is for somebody to work for you for 4 weeks then leave. That only complicates your struggle to keep up with demand because you are now back to trying to find more help and will have to retrain another person. So take your time in the hiring process to ensure you get a quality candidate.
Planning your growth is important because it allows you to prepare to hire the people you need to keep up ahead of time. This goes back to hiring slow. If you know you have a new account in the pipeline you better start culling through resumes so you can take the time needed in the hiring process.
Preparing early for the growth also allows you to order the ingredients or materials you will need to make the product. The last thing you want is to run out of a particular ingredient in your product and not be able to fill an order. So ordering your product in advance of production runs is crucial, especially because your supplier will occasionally run out and that will leave you scrambling to find another source. So it’s also always good to have back up suppliers on every ingredient.
Invest in Equipment
One of the biggest things that have helped us keep up with demand is equipment. In the early days we did everything by hand, other than mixing the ingredients in a mixer. As we grew we improved the process. First we added a larger capacity mixer, next we improved the mould we used to press out the bars, and later we eventually added a machine to press out the bars. That was a difficult decision for us because we wanted to keep everything done by hand, but the overhead cost and logistics of managing large amounts of people outweighed how much time and money we would save by having a machine press out the bars. We still do a large portion of our process by hand, but having machinery was necessary to keep up with demand.
Work with your customers
Lets say you are struggling to meet orders. It’s important to be honest with your customer and let them know what is going on. We have had a couple instances in the past where we had to let the customer know we couldn’t meet the entire order and requested they decrease the order and let us fill the remainder of it at a later date. Each time they have been more than happy with the outcome.
It’s important to under promise and over deliver. If you think it will take you two weeks to fill a large order let your customer know you need a one month lead time, then wow their socks off when you deliver in two weeks. Having the longer lead-time gives you a cushion of protection too, in case something goes wrong. So, always make sure your customer lead times are ample to fill orders.
It’s also important to remember that problems will arise, delays will certainly occur. So, be flexible, learn to adapt, and don’t fret when issues do arise. Problems have a way of working themselves out if you are aware they exist and put a little bit of pressure to the problem to solve it. Rarely will a demand problem be so catastrophic that you lose the business of that customer. If anything it will make you stronger so you can continue serving your customers with excellence.