Financial experts seem to be teetering on the verge of labeling the country’s current economic situation a recession. It’s a label the government seems loathe to use, believing it will wreak further havoc on the stock market and send the economy spiraling down even further. No matter what you call it, things are difficult and it looks like they’re going to stay that way for a while. The economy is slow, credit is tight, fuel is high and bankruptcies are up. For many companies, the combination has delivered a knockout punch and they’re down for the count.
Last week we started a series on Why Businesses Fail (see our July 14-18 posts). We figure it’s better to learn from the mistakes of others than repeat them yourselves. This week we continue our list of the most likely reasons businesses fail:
- Inappropriate inventory. You can’t sell what customers don’t want. Too much or the wrong inventory causes cash flow problems, wastes sales time and drains profits. By constantly tracking individual inventory items, you can make adjustments and effectively manage product flow on a weekly and monthly basis. Don’t make the mistake of relying strictly on accounting summaries to track inventory. Accounting tracks inventory by dollars, lumping moving and non-moving inventory into an average. To adequately control inventory, you need to track the actual physical items.
- Excessive capital investments. Americans seem to equate success with things. Bigger cars, bigger houses, the latest gadgetry. In business there can be a tendency to buy newer, bigger, more expensive tools and equipment as a mark of success. But success in business is really based on the quality of the product or service you produce. That’s what drives sales and repeat business. Equipment purchases should relate to your ability to improve or maintain the quality of your product. Certainly, you need to update equipment as technology changes to be competitive. And often the expense of new technology can be recouped in short order by savings in energy, floor space or worker health and safety. But capital equipment purchases should always be evaluated for their ability to enhance the production of a quality product.
If you’re looking for a cost-saving solution for your capital equipment investment, turn to the material handling experts at DJ Products. At DJ Products we manufacture ergonomically designed electric carts and motorized cart pushers for business, industry and service providers like hospitals. Our products are smaller and more maneuverable than traditional powered equipment like fork trucks, walkies and riding tugs, yet are capable of moving the same sized loads with ease. A smart capital investment, our products are less costly than purchasing traditional powered equipment. Because our carts, tugs and equipment movers are ergonomically designed, you’ll also realize an attractive savings in worker health and safety costs, including medical bills, insurance payments, workers’ compensation and lost man-hours. Visit the DJ Products website to check out our full line of ergonomically designed electric and motorized carts.
To be continued