By James Pruitt, Senior Staff Writer

Even the best inventory management sometimes doesn’t prevent stock from backing up. For example, economic fluctuations and weather changes can back up the supply chain.

Entrepreneurs have many routes to sell off excess merchandise. Each route may depend on the state of the product. For example, perishable goods require safe disposal. In cases where the days of the product are limited, quick offloading strategies may include giveaways and rewards programs to loyal customers.

However, other sorts of goods may retain value even while accumulating cobwebs in storage space. Examples may include jewelry, cooking implements, tools, and auto parts.

The best options may include (1) online sales, (2) redirected marketing, (3) bulk discounts, (4) product bundling, and (5) liquidation to peer companies. 

(1) Online Sales

Posting excess products online brings exposure to a wide range of markets. Someone may need exactly what you may find worthless.

Remember that terrible ET video game from 1982? Most of the excess inventory ended up in a landfill. These days, workable cartridges can sell for over $1000. Buyers may include not only collectors of vintage arcade games, but even people simply willing to reverse-engineer the surviving game cartridges just to figure out what the original software engineers were thinking.

Car parts are another example. Restorations for certain older cars may require specialized parts, and online sales might provide the right match between seller and buyer.

The point is that someone, somewhere, likely has a use for your excess product. Careful research may reveal the right channels.

Excess inventory may provide the motivation for developing your business to include an online store. Setting up an online site these days may be surprisingly quick and easy. Even basic web-builder software such as WordPress can provide the right tools. Websites such as Godaddy.com and Etsy.com can also facilitate e-commerce.

(2) Redirected Marketing

In many cases, a small company may find itself with staff geared toward promoting certain products over others. The flagship product may sell out prematurely, leaving behind excess other products.

While most appropriate for retail stores, the practice of double or triple-exposing merchandise may garner more attention from shoppers. In other words, business owners can show a product in multiple places throughout the establishment.

(3) Bulk Discounts

Companies with too much product should consider marketing in bulk. Such discounts can range from buy-one-get-one-free deals to progressive discounts for increasing amounts of products. In other words, as the consumer buys increasing numbers, the discount may progress from thirty percent to forty percent to fifty percent, based on volume.

(4) Product Bundling

In some cases, one product sells like hotcakes while another product lingers. In such a case, merchants can bundle the hotter product with the slow mover for a slightly higher price. Many consumers will appreciate the bargain, especially if one product can enhance the functions of the other.

(5) Liquidation Sales to Other Companies

Many websites facilitate offloading of excess products between companies. These sales provide a discount to peer businesses while relieving others of bulk, freeing up storage and maintenance costs. These sales provide the best option when sales at a high per-unit price are less of a consideration. Consider BoxFox and Liquidation.com as viable online forums for such transactions.

This list is by no means exhaustive. Other creative tricks have included giveaways and incentive programs to loyal customers. In sum, business owners should tailor their downsizing practices to the type of product and the circumstances of the business. Proper use of a company’s assets requires creativity, as well as an understanding of key niches in the market.

VAMBOA, the Veterans and Military Business Owners Association hopes that this second article of this two-part series has not only been valuable but provided some unique perspective.  We work hard to bring you important, positive, helpful, and timely information and are the “go to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:  https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

By James Pruitt, Senior Staff Writer

Vast deposits of excess stock can leave small business owners bewildered or perplexed in the wake of a “failed” marketing attempt. Remember, excess inventory generally has some value to someone. However, prevention generally spares entrepreneurs storage expenses and manufacturing costs. 

Whatever happened to the Avon Lady? Multilevel marketing schemes are back with a vengeance. These companies can famously leave a garage full of excess merchandise. But what about the tribulations of small business owners who manufacture their own products?

As a general principle, unused products are a liability for small businesses. Such products gain the moniker of “deadstock” after collecting cobwebs in the back shelves of warehouses.

The Pandemic has brought fluxes in inventory to all sectors of the economy. Supply chain disruptions have plagued the worldwide economy since March of 2020. Skeleton crews on all fronts have left companies alternately oversupplied or undersupplied, even as demand has mushroomed since the early part of this year.

Inventory shortages are nothing new. First, demand fluctuates naturally due to a variety of market forces. Fashions move forward, circumstances change, and consumer needs oscillate accordingly. 

Second, businesses sometimes rush to meet demand. In the process, quality may suffer, leading consumers to search elsewhere. Over-eager business owners sometimes churn out subpar products to meet demand. The result leaves the owner in the lurch for storage and disposal. No one wants a trove of shoddy “skinny jeans” manufactured in 2008, especially in 2021.

Third, some businesses may lack effective inventory management systems. Internal operations may well disrupt a good balance between different types of products. Good online inventory management programs may include Fishbowl, Netsuite, and Quickbooks, although options for businesses are vast, and may include proprietary options as well. Also, consider the everyday operations of a company outside the computer system.

Fourth, the business may be marketing one product at the expense of another. Marketing resources may gravitate in one direction, based upon the expertise or biases of the company staff. Leadership on hand may know more about one product than another. Sometimes leadership and staff simply prefer one product over another. Such cases may simply present a human resources challenge.  Enthusiasts of one type of product on the marketing front may compensate for an oversupply of fans of another.

Finally, one person’s trash is another’s treasure. Remember that disastrous ET video game from the early eighties? Most ended up in a landfill. The landfill was excavated, and some collectors of vintage arcade games paid over $1000 for cartridges of a terrible but historically significant video game. Even in most cases of overstock, hope remains.

Best practice avoids excess supplies of unmarketable products from the outset. However, as with most of life’s problems, excess inventory is often unavoidable. With the resurgence of multilevel marketing, overstock has reached new levels in some quarters. However, certain business practices have long resulted in inventory imbalances, even before the Pandemic. 

In Part I of this two-part series, we examined strategies to prevent excess deadstock, to begin with. In Part 2, we will examine strategies to dispose of excess inventory, online and otherwise once such stock inevitably accumulates.

VAMBOA, the Veterans and Military Business Owners Association hope that this article of this two-part series has not only been valuable but provided some unique perspective.  We work hard to bring you important, positive, helpful, and timely information and are the “go to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:  https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

Do not forget that VAMBOA members receive significant discounts on technology needs.   Check them out here: https://vamboa.org/dell-technologies/ 

By James Pruitt, Senior Staff Writer

Entrepreneurship entails bravery. New business owners give their time and resources for an idea. In some cases, entrepreneurs put their own retirement plans on hold, at least while building their new business. In other cases, an expanding business may need to consider the best options for retirement practices for employees. In all cases, careful research about retirement options should precede the development and expansion of any business.

Several options exist for both owners and employees. These options include the Self-Employed 401(k), the Simple 401(k), the Simple IRA, the Roth IRA, and the SEP-IRA. Each has different applications for both owners and employees.

Features of various retirement options include the “employer contribution,” the “employee contribution,” and differing administrative methods based on factors such as size and contribution amounts.

Setting up a Retirement Plan

The type of retirement plan depends on the nature of the business. The business may be a sole proprietorship, a family business, or may depend upon skilled employees. 

Ideally, of course, a successful business should pay into the futures of their employees or the business owner at the very least. When businesses don’t account for retirement plans, they generally have a lack of incoming funds to blame.  

Some businesses only have the owner to account for. Others need to attract valuable employees, which factors into the need to undertake the complex process of determining the correct retirement package for the onboarding process.

The following website provides a starting list of financial companies that may provide retirement options, as well as advice for further research: 

https://www.investopedia.com/articles/personal-finance/102015/10-providers-401k-plans-small-employers.asp

Options for Business Owners

Veteran Business Owners come from a variety of circumstances and walks of life. Some may have a vested pension from a previous employment situation. Others may be taking a full plunge before they’ve planned for retirement. 

At times, a sale of the entire business offers the only retirement option for a small business owner. Remember that a full sale is viable only in cases where the business can continue to operate.

The self-employed 401(k), or the “solo 401(k),” provides the best options for business owners without employees. Other plans treat employers differently from employees. This plan offers flexibility to tailor the contributions to the interests exclusively of the owner. For example, the proprietor has the option to set the “employee contribution” up to 100% of the compensation up to a limit of $19,500 for those under 50. Older business owners can contribute up to $26,000. An “employer contribution” can reach 25% for a total of $54,000.

Options for Employees

In order to attract the best talent, Veteran Business Owners should research their benefits packages. Many businesses need healthy relationships with employees to function. In light of the current labor shortage, some businesses need tradespeople with or without college degrees. 

Varieties of benefits options may attract these valuable employees. Among these are a traditional 401(k), a “Savings Incentive Match Plan for Employees,” and a “Safe Harbor 401(k), which reduces administrative costs while reducing flexibility. Finally, the “Individual 401(k)” is a special option for couples who jointly operate businesses. 

IRAS versus 401(k)s

“IRA” stands for “Individual Retirement Account.” An employer does not pay into such an account but may provide eligibility to a certain IRA fund through a deal with the financial institution. On the other hand, a 401(k) offers joint contributions between employee and employer. 

One difference between an IRA and a 401(k) lies in the relationship with the employer. However, a second difference lies in taxation. Generally, with Roth IRAs, contributions to the account are subject to taxes, but contributions withdrawn in retirement are exempt. Withdrawals from 401(k) accounts, however, are indeed taxed.

VAMBOA, the Veterans and Military Business Owners Association hopes that this article has not only been valuable but provided some unique perspective.  We work hard to bring you important, positive, helpful, and timely information and are the “go to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:  https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

Do not forget that VAMBOA members receive significant discounts on technology needs.   Check them out here: https://vamboa.org/dell-technologies/ 

By James Pruitt, Senior Staff Writer

Short-term credit often provides vital sustenance to a new business. Short-term creditors also commonly predate on fresh entrepreneurs.  Regardless of the need, business owners should use such lenders cautiously.

“Loan sharks” can suck businesses dry in their times of vulnerability. This stage of the pandemic likely exposes the vulnerabilities of many businesses. Small businesses now likely struggle with debts as well as labor and inventory. Predatory lenders may circle like vultures at this stage.

Are there healthy routes to short-term credit? Absolutely. Three outlets can provide safe short-term loans for the cautious small business owner.

Lines of Credit and Online Short-Term Loans

Always beware of unethical practices by creditors. Predatory lenders often exploit smaller business owners with exorbitant Annual Percentage Rates (APRs) and crushing terms. Of course, businesses do need a cushion when crises arise. This cushion could be hard cash in a savings account or a line of credit from any of a variety of lenders, including mortgagers and small banks.

As discussed in our previous blog posts, cash flow poses issues for many business owners. You need money to make money, right? A trustworthy lender usually asks two things from a small business for a simple line of credit: At least six months in business, and at least $50,000 in annual revenue. Short of these requirements, Veteran Business Owners should give a second look to any lender offering short-term lines of credit. A line of credit may provide the “emergency fund” to protect a business in case of a short-term crisis. 

In a pinch, an online short-term loan may offer a tempting alternative. Direct cash from a lender may provide another “safety net.” However, absent reasonable terms, business owners should look elsewhere before contracting with lenders that seem too eager to dispense short-term capital. Their collections efforts will likely haunt them afterward.

Most online short-term loans have similar terms as lines of credit. A decent credit score tends to hold greater significance when the lender offers hard cash outright. These loans offer further risks, and the lenders use even more caution when approving short-term cash. 

These loans can range from four to five digits. However, bear in mind that the payback period can range from three to eighteen months. Creditors will want their money in the meantime. Lenders will also wield greater leverage in negotiations for payment plans and repayment terms. In short, despite the occasional necessity of short-term money, lenders inevitably demand their pound of flesh afterward.

Equipment Loans

These loans are a different sort of animal. Lenders foreclose on the equipment itself in case of default on these loans. Such equipment may include kitchen equipment, warehouse machines, and even company-owned mobile devices. Most lenders expect more security from business owners for such loans, since damage to equipment can greatly decrease its value following repossession.

Trustworthy lenders generally expect eleven (11) months in business, a decent credit score, and $100,000 in annual revenue before securing a necessary piece of equipment. The risk to the lender is greater, so the contractual terms place more responsibility on the borrower.

When to Use a Short-Term Line of Credit?

All businesses (and even individuals) should ideally have an emergency fund. Lines of credit and short-term online loans may plausibly furnish that cushion. Additionally, Veteran Business Owners may lack investment funds during their idea’s development phase. In the case of shorter loans and payment plans, both lenders and borrowers generally should recognize the urgency of repayment. Hence, everyone should apply a fine-tooth comb to short-term financing. Short-term lenders can be as sketchy as they are sometimes necessary.

VAMBOA, the Veterans and Military Business Owners Association hope that this article has not only been valuable but provided some unique perspective.  We work hard to bring you important, positive, helpful, and timely information and are the “go-to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:  https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

Do not forget that VAMBOA members receive significant discounts on technology needs.   Check them out here: https://vamboa.org/dell-technologies/ 

By James Pruitt, Senior Staff Writer

No company is a fortress, least of all small businesses. However, threats from outside are very real. Outside hackers as well as internal saboteurs can ruin a company. As the Internet comes of age, the good business practice requires that business people grow in sophistication just as the motley crew of potential scammers does the same.

1) Relationships with Employees

Creating a culture of security can save a business. One data breach can ruin a company. Access to a company’s online records merits careful consideration.

On an ongoing basis, workers should receive education about the dangers of online interlopers. Not every computer operator may understand even basic security concepts, such as the dangers of opening attachments. Periodic security courses can refresh employees’ knowledge regarding outside scammers, and the education can even benefit the employee in the long term.

At the very least, measures should be taken to ensure the separation of online life between work and home.  The use of workplace confidential information on unsecured home devices could make easy marks for scammers hungry for confidential information they can sell online.

Assuming the employee has an email account, the employee should know the basics of online scams such as “phishing,” fake online antivirus scams, and any of a host of more insidious schemes that may install malware or spyware onto company computers. Here is a link to some of the most common scams: https://uk.norton.com/internetsecurity-online-scams-5-most-popular-scams-in-2020.html.

Additionally, former employees commonly defraud small businesses with the information they carry off from the worksite. Employers should be as realistic about their own needs as they are about their relationship with their workers. As employees leave the team, their logins should be deleted immediately. Password management software may help with this process. Applications such as Dashlane or Lastpass may prove invaluable in managing IT aspects of any sort of offboarding.

In any case, good business practice demands (1) careful education of employees regarding good security practices, and (2) consideration of the terms of employee separation.  

2) Consider Industry Standards: Different Industries may have Different Forms of Sensitive Information

Some businesses may handle specialized information subject to unique legal requirements. For example, medical records may constitute PHI (Personal Health Information). In such cases, contracting businesses need to adopt practices under HIPAA (the Health Insurance Portability and Accountability Act) to ensure compliance. These practices may include seemingly extreme measures including computer privacy screens, injunctions against in-office cell phones, and measures to keep medical records out of the open air. Such measures may seem silly but are important for small businesses contracting with medical organizations that handle protected health information (PHI). Violations of HIPAA may range from medical ridicule to identity theft. These violations may also result in any range of consequences from jail time to monetary fines.

Other similar privacy laws may include the Family Educational and Privacy Act (FERPA). Many smaller businesses handle confidential information under FERPA and HIPAA. Protection of such information is crucial and may require special training under each statute.

3) The “Right” Security Expertise

Many companies now outsource their information technology needs. As these companies become more affordable, Veteran Business Owners should research IT services that best fit their niche. Many independent companies specialize. For example, legal, medical, and educational IT companies may provide the right expertise for various relevant companies. The expertise of such companies may provide crucial expertise for the unique logistical and legal demands of smaller companies handling sensitive online information.

Finding the right security software can present another problem. The tricky landscape of online security can daunt the most discerning business managers. Some online security applications are outright scams. Others may not quite provide the necessary airtight protection against the most skillful breaches. Many small businesses find larger, established companies such as Norton satisfactory. Others choose to do their own research.

The Bottom Line

In sum, honesty and common sense should prevail in the management of company information. The most sensitive information may include private customer information, gatekeeping data such as passwords, and internal proprietary information hidden within company records. In fact, the standard should be airtight security whenever possible, rather than mere due diligence.

VAMBOA, the Veterans and Military Business Owners Association hope that this article has not only been valuable but provided some unique perspective.  We work hard to bring you important, positive, helpful, and timely information and are the “go-to” online venue for Veteran and Military Business Owners.  VAMBOA is a non-profit trade association.   We do not charge members any dues or fees and members can also use our seal on their collateral and website.   If you are not yet a member, you can register here:  

https://vamboa.org/member-registration/

We also invite you to check us out on social media too.

Facebook:  https://www.facebook.com/vamboa

Twitter:  https://twitter.com/VAMBOA

Do not forget that VAMBOA members receive significant discounts on technology needs.   Check them out here: https://vamboa.org/dell-technologies/