Managing Small Business Supply Chain Difficulties

Small businesses are a huge economic engine for the US. As of 2021, there were over 32 million small businesses in the US.[1] They employ about 47% of the labor force in the private sector.[1] But today, small businesses are facing big problems when it comes to sourcing materials.[2][3] Surveys by government organizations and anecdotes all point to the fact that supply chain woes have been a huge hurdle for small businesses over the past year.[2][3]


Big businesses like chain stores typically employ people just to source goods and negotiate pricing. However, when it comes to small businesses, there’s only a small team.[3] Orders are also smaller. Because they lack the economies of scale, small businesses find it harder to see competitive advantages.[2][3] For their part, suppliers feel they must prioritize the biggest orders for their largest clients.[3] This makes things difficult for small business owners who find themselves at the end of the line. Often, they find that their smaller orders aren’t prioritized or fulfilled by vendors.[3][4]


However, entrepreneurs also have one very important advantage. Being smaller, they’re typically more nimble than larger competitors.[4] Small business owners have been finding ways to adjust since the beginning of the pandemic, when supply chain issues first reared their heads. They may decide to sell smaller versions of the same goods, for example. Or they may slightly change their product offerings.[4] Some business owners have also adjusted by placing larger orders than normal.[3] They’ve also been more selective about the vendors they work with, showing a strong preference for those who offer annual contracts and pricing.[3]


At Alliance Leasing, one great way we’ve been able to help borrowers is by financing used equipment.[5] Traditional lenders like banks and credit unions will only finance new equipment.[5] At Alliance, we also offer a working capital flexible finance program. This gives entrepreneurs the ability to quickly adjust to new circumstances. With working capital, for example, a manufacturer could make a larger than average order and rent a storage space to hold a portion of it.


We’re experts at helping small business owners make smart moves. That’s why we’re still going strong after more than 30 years. Call us today, and let us know what your business needs. Chances are, we can help.