Using a manufacturer from China is saving you how much? The most recent barrage of manufacturing snafus coming out of China ( i.e. contaminated pet foods, use of lead paint in children's toys, orders mislabeled or poor quality items) is a universal problem for all manufacturers, no matter where they are located.

These mistakes are costing your business a major premium. It started out you were saving 50-40% on manufacturing vs. using someone else. Many times unit cost does not include the landed costs to the USA. Landed cost include shipping, tariffs and any taxes. The lowest cost is based on shipment by sea which takes about 6 to 8 weeks, not the 1 week or express by air. Don’t have the right docs, your merchandise is frozen in customs limbo for as long a they deem necessary.

If you have a major problem, you might have to travel there to resolve it, which means your paying the highest price airline ticket ( can’t wait 3 weeks for a fare to drop a few thousand dollars, it could cost you millions). Now you have merchandise you can’t use and will be waiting 8 weeks for the next shipment.

Now you really have limited options. 1. Don’t sale any merchandise for 2 months, layoff employees if this is your only product? 2. Pay extra to ship by air and pay the premium for deviating the pre=arrange schedule ( these extra cost might wipe out all your profits ).

So you have fixed the problems quickly but your customer base is spooked and your getting flooded with returns. Now you are pulling your hair out and thankful that your contract agreement covered these contingencies in your favor [ You did get a valid enforceable contract?].

Careful preparation and due diligence should avoid or mitigate these problems with any manufacturing vendor.

Check List for Success

1. Do your research. Do not short change the process it could easily cost you millions. Visit the manufacturing site, the production floor, meet the workers, managers and decision makers. Face to face still goes a very long way in the communication process.

2. Check with their references and clients who have a long history with your proposed manufacturing vendor. If your using a broker to negotiate for you compile a list and check out their track record.

3. Quality controls should be agreed to and followed ( i.e. like a periodic inspection on site and when the product is received for distribution ).

4. Clause in contract that the process used to create the qualified product can not be changed without being re-qualified and the results being signed off by you. Acquiring parts from a different vendor or changing process steps to lower cost may effect the quality and performance of your product. Be wary because you supplier is looking to drop his costs to increase profit.

5. Check your quality frequently and randomly with your own quality control office or trusted third party.

6. Know all your possible cost scenarios in regard to shipping by sea, air or land (truck or train). You should send a small quantity of prototypes by all your possible shipping methods to confirm time frame of transport and documentation process. { piggyback real world packaging test too }.

7. Best to have at least two suppliers shipping you product. But if this is impossible have one pre-qualified in the wings ready to produce if necessary. Qualifications should include:

a. Ability to make product to specifications
b. Ability to deliver on time
c. Ability to turn over changes quickly.
d. Communicate effectively and timely

Other factors to consider, who are their other customers. You don’t want to be ignored because you’re a small client and you may not want to be a pioneer as the only client. Financial exchange rates long term and short will critically affect low margin products.

We will assume you know nothing about the industry except that it involves children but you have always dreamed about quitting your job and starting a daycare. That is pretty much the position I was in when I started my day care 10 years ago and I spent a year and a half researching and learning before I got going. But, no panic. Allow me to cut short the research time a little with some pointers on how best to prepare for the exciting journey that is starting your own child care business.

Every successful venture starts with a well thought out business plan thus enabling the entrepreneur (you) to get a clear, overall picture of what your business will entail. This is the vital, unavoidable first step if you are to have any chance of understanding what it takes for your idea to succeed. Many people get to the business plan stage and no further due to a realisation that the project is unfeasible for whatever reason. So, use your business plan as the first step in your research to figure out if your business will be viable.

The vital elements of starting any business are covered by your business plan. Introduction/description,benefits, market research, key financials and conclusion. Like a good teacher it provides the questions and ensures you fill in the blanks. I found it to be a great checklist of things to do as I worked my way methodically through each of the required steps. Areas I might have omitted or glossed over were covered leaving me with thorough and accurate vision of my business. Here are some suggestions for business plan templates.

Arrange a meeting with your local licensing representative, have them visit your premises and find out what they will be requiring in terms of premises layout, contents, play area and general health and safety issues. They are the experts and responsible for granting your license so, you want what they want. Get them to give you guidelines and tips on policies and paperwork. Do not be afraid to ask questions. Go to this meeting prepared and armed with a list of questions so you can learn as much as possible.

When I was researching my business I received some of the best tips, hints and advice from other providers, in fact, I still make information gathering visits once a year and learn something new everytime. Existing daycare owners are an invaluable resource for practical advice. Call up a couple of established providers (preferably not too close to your proposed venture, they might not be too enamoured of the impending competition!), explain your situation and set up a day to go visit. People are usually delighted to help aspiring entrepreneurs and love discussing their own business. There is nothing quite like the advice of people who are on the ground, doing the day to day business.

Be sure and bring materials to take notes while you observe and ask questions. Notice daily routines, room layout and equipment, methods for dealing with behaviours, staff and child interaction, health and safety procedures, hygiene practices, peruse paperwork (ask for copies of the paperwork to help guide you when formulating your own). Get tips on advertising, pricing and suppliers. Attempt to speak to different members of staff and management so you get a good overview. Don't just ask them what they do but also ask for their opinion on how things could be better. These open questions will provide you with an immense wealth of knowledge, all of the practical, hands on variety.

Taking just these three steps and seeing them through to completion will give you a fantastic headstart in terms of researching your business. Your confidence in yourself and your ability to achieve your vision will peak and you will be propelled into further positive action. So, what are you waiting for...get researching.

When you sit down at your desk and get ready to send a packet of information to a potential client you go through a process to complete the task. Webster’s defines a process as a series of actions, motions, or operations leading to a result. Processes are meant to be developed and refined during periods of growth, and even periods of stagnation. All are developed to increase efficiency and best business practices.

A new process does not mean, however, adding more to an already overloaded schedule, in the terms I’m talking about. It means making decisions—deciding what stays and what goes. There are processes you have that are automatic, mailing informational packets or taking information from a potential client over the phone. It’s what happens to that information that you have acquired that you have to decide, do you take the next step right away and enter the information into your contact management system as a lead, or do you just wait for them to call? When do you follow up or even who follows up? Those are the types of questions to be answered during any process evaluation. Some larger companies use things like process mapping and programs like “Six Sigma” to develop their best business practices. As a small business owner you don’t have the staff or the luxury of a program like that. However what you do have is desire. Desire to grow and be the best in the field you are in. And this want and need for success is what will drive your company toward developing processes that will open your schedule and bring in the clientele and growth you want.

Mapping out your current processes whether in a calendar form, a process map form, or just a brain dumping a list of steps and next steps, you are taking the jump to eliminating possible chaos from your day. The first step you have to take is setting aside some time to examine where you are right now. One thing I always stress with every individual I talk to about developing a new process is, “To eliminate any missteps and even possibly just cut 15 minutes from your day of busy work, you must spend 4 to 8 hours developing a new process.” When taking the jump to process development, you want to make sure that you know what’s wrong.

Remember the question I posed above. What do you do when you mail/or email a potential client an informational packet? Where does that information go? Do you have an assistant that takes that information and enters it for you? Do you create a potential client folder with their information for follow-up? What is your process? Do you have a process for this? In developing a new process, you look at your issue. In this instance, it’s that you don’t have a system down for follow up and organization after a mailing. The potential client information gets lost in the shuffle, until they decide to call and purchase your services. So what about all the potential business you lost? Here’s an example of what a developed process list for above scenario can look like: Following Up with Potential Clients

1. Mail the packet of information
2. Contact information entered as a lead in contact management database
3. File created with checklist of to do’s added to file and information on the potential client
4. Follow up call entered into your schedule
5. Follow up call made

Keep in mind, there is definitely more or less to this process depending on your services and your field, and how much you information you require or don’t require for your record keeping. The next step is evaluating how much time you as the person in your company who works solely with the clients actually completes in the above process. Is it all of it or none of it? That’s where delegation comes in. What can you delegate to someone else to make it easier for you to focus on the growth that matters so much to your business? In my professional view, the first four steps are what your “Assistant” can take care of. That’s a good ½ hours worth of work, during which you can be selling to another client. Can you afford not to develop processes and delegate? You may think yes, but in the long-run, your best business practices are what may stand out to a client. Efficient processes will bring change, and again, “Growth is contingent on change.”