Early-Warning-Systems for Small Businesses



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Most of you would say, that this might not be the most important problem small businesses have to solve during their business operation. Well, that might be true, but on the other hand, if your business has an early-warning-system, than it could assist you in operating your business and keeps you focused on solving the bottlenecks you are actually facing.

But first of all, in case of Early-Warning-Systems it is necessary to define what a small business is. A small business is usually a business operated by 1 or a few people, but could also be a company with as much as 500 employees. This article concentrates on small businesses with 1 to 50 employees. As this is the definition of small business, than we have to define what an Early-Warning-System should look like.

While running a small business, the people involved usually have not the time dealing with Early-Warning-Systems a lot. Because of the lack of time, there has to be a lean solution, which takes care of the following things:

• easy to use solution
  
• not time consuming
  
• showing recommendations for possible actions/measures on early warnings
  
• giving priorities which bottlenecks have to be solved first
  
• having a short reporting cycle
  
• a reasonable price, every small business could afford.
  

Lets go to the list one by one.

Easy to use solution

What does that mean? In my opinion, easy usage is, when something is easy and fast to understand. Something I do not need to
read a huge book with hundreds of pages or where I have to attend a training, which keeps you occupied by several hours or days, just to know the basic features.

Having a system with huge databases and many features and reporting alternatives, is not only time consuming, it is also annoying, because you ever feel you need to perform a lot more reports. And you
always feel that you may missed something.

Furthermore a good Early-Warning-System should work with only few inputs. But that’s another point.

Not time consuming

When you have to input a lot of data that might be a time consuming task once. On the other hand, you do not know, if a huge database will make your Early-Warning-System better. So it is better to focus on a few important data, than having a huge database, which you probably never use.

When concentrating on important data, you are not able to use every data from your business operation directly. Some data have to be calculated to business ratios (Key Performance Indicators = KPI), which are a better basis for analysis. But this brings to mind that you have to select the right business ratios. There are so many of them.

Well, there are a few which could be used for all kinds of businesses, such as

• Customer Contacts
  
• Customer Complaints
  
• Orders in Process
  
• Customer Loyalty
  
• Usage of capacity
  
• Order Processing Time
  

to show just a few. Would be an analysis, which only uses 30 business ratios or business numbers a time consuming solution? I guess you say no. But, what would be if you have to fill in these numbers every
day? Well, that should not be necessary. One time a week should be enough.

However, even if 30 or 60 values for business ratios per week does not sound much work, but there is a little more work to do upfront, before you could use these values for analysis. You have to find the
values in your company, you have to calculate the business ratio values and so on. This I believe sounds to be a lot more work as you thought.

When you install the right procedure to get the necessary data for analysis, you may have a big additional one-time work. It’s all in the procedure you choose. Make it as easy as possible and it won’t be a time consuming task.

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