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Keeping up with demand

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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.

Anticipate growth
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.

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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.

Follow the 10% rule for creating products and services

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If you are looking to start a business there is no reason to reinvent the wheel. You just have to make it better. 10% better to be exact. Why not develop something completely new that nobody has ever seen before? Because, the market is not proven, and there is a huge consumer education factor you would have to over come.

New products hit the market every day, and most of them are just an improvement on an existing product. Take the Pebble Watch for example; they took your everyday watch and mixed it with smart phone capabilities. Even iPhone wasn’t that revolutionary, but it was exactly a product I wished existed. When iPhone first came out I carried to work every day: a PDA, a cell phone, and an iPod. Apple simply combined the three devices into one. Thank you, Apple!

When I launched Bearded Brothers, A Wholesome Snackfood Company that makes organic energy bars; I wasn’t looking to re-invent the energy bar. I simply sought to improve on what I saw was missing from bars on the market: great taste, raw, unprocessed, gluten & soy free, and organic. We even eventually switched our wrapper to a compostable one.

The 10% rule even applies to those offering a service or software product. Take career coaches for example. They are a dime a dozen. What is going to set you apart from the next guy is the value you offer. Many times it will come down to personal preference, but as long as you are offering something that somebody will see as more valuable you are setting yourself up for a win.

Creating and launching new products doesn’t have to be that difficult. You don’t have to spend years doing research and development, especially in markets that are already proven. Just follow the 10% rule, make a product that is at least 10% better than the competition and you stand a good chance at competing with the big guys in competitive markets.