It’s not yet Thanksgiving, and some consumers may roll their eyes at the Christmas decorations already going up in storefront windows and at their neighbors’ homes. But for small businesses, preparing for the holiday gift-giving season takes months, so it’s better to prepare early.
Small business alternative lender CAN Capital recently released new insight into how SMEs are preparing for the impending rush. And, in true forward-thinking fashion, analysts also examined how small businesses are preparing for 2016 already. Their New Year’s resolutions, it seems, are more focused on the back office.
In a survey of more than 1,000 of its small business customers, CAN Capital asked about how they are gearing up for the weeks typically marked by high sales — meaning a flurry of items on the checklist.
Inventory management, analysis shows, is at the top of that list. The majority of SMEs, in fact, are most concerned about this, with 53 percent citing inventory management as their chief worry.
[bctt tweet=”The majority of SMEs are most concerned about inventory management.”]
That far surpasses the second most cited concern: competing with major retailers (27 percent), followed by boosting seasonal staff numbers (21 percent).
While balancing the weighty demands of the holidays, SMEs are also already extending their outlook into next year. CAN Capital asked these businesses what their top priorities will be as they ring in 2016, and the responses were a bit less lopsided.
Again, inventory was their focus, as 29 percent of SMEs said expanded inventory and investment in new equipment landed as their top choice for 2016 goals. That was followed by the 24 percent that cited improved technology systems as their leading priority.
Eighteen percent said they plan to focus on expanding marketing efforts, and 17 percent said business strategy and consulting will be at the forefront of their 2016 operations.
Corporations large and small may always be looking ahead in an effort to predict and level out their inventory, but separate analysis from Supply Chain Insights’ Inventory Optimization research points to just how difficult it can be for businesses to forecast their inventory levels and why prioritizing inventory management this holiday season is probably a wise move.
Analysts said that while businesses have a consistent forward view of inventory, supply chain tools and processes are decades-old — and that’s while modern challenges like globalization and technology heighten the need for more sophisticated management tools.
According to Supply Chain Insights, a survey of businesses between Feb. and Oct. 2015 discovered that businesses using advanced software are significantly more satisfied with performance than those using legacy software tools. Researchers found that 63 percent of advanced SaaS users were satisfied, while just 34 percent of basic SaaS tool users were.
The analysis uncovered a higher return on investment, higher effectiveness at making inventory decisions and more accurate inventory level predictions with more sophisticated inventory software use.
The findings have a significant impact on corporate cash flow, researchers said.
“While the supply chain organization has the primary responsibility to reduce inventory in over 97 percent of companies surveyed, the effective use the technologies requires close coordination and alignment with corporate finance,” reports stated. The report added that those businesses whose inventory teams lack understanding of the financial function of a corporation are less likely to adequately adopt more sophisticated inventory management services.
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