Yes, it’s true: as we discussed in our last article, raw materials shortages can really wreak havok on your business. (Luckily, last time Gary was able to find a way to stabilize things for his bakery!)
But did you know that there is a short and predictable list of factors that are most likely to cause raw materials shortages?
Gary didn’t know that at first…
If you’re a regular here at Zattatat, you know that Gary is an accountant in his 40s who runs a side business as a baker. Usually he loves this double life that he’s living. But recently…
Gary’s main problem was that he was caught off-guard. Sorry to play into accountant stereotypes, but the fact is, Gary usually prides himself on being organized and prepared in both his main job and his side business – not to mention his personal life!
But Gary, like many small business owners, wasn’t all that well-versed on the common causes of raw materials shortages. That meant he wasn’t prepared to notice and predict things that could (and did!) impact his business.
Luckily, Gary DID have the wisdom to realize when he was in over his head and ask his friend Process Cat for help. And
And Process Cat told Gary about the common…
Causes of raw materials shortages
Yes, there are all sorts of things that could cause a raw materials shortage. But if you’re aware of the top few causes, you’ll avoid being totally caught off-guard by most of them.
True raw materials shortages
You probably guessed this one: sometimes the limitation simply is the amount of a particular raw material that exists on Earth. The downside of this cause is that there’s little that can be done to actually solve it, but the upside is that it’s relatively predictable.
Natural disasters
It’s easy to understand this cause too once you think about it: earthquakes, fires, floods, and all manner of natural disasters can cause an *effective* raw materials shortage even if the material itself is technically in abundance. If the area where a certain raw material is sourced has a natural disaster, that material will be in short supply on the global commodities markets.
Human and Political disruptions
Political unrest can cause disruptions in the supply chains of raw materials. So regardless of whether you agree, disagree, or are neutral on a political issue in the area where your raw materials are sourced, when you put on your business owner hat you need to look at any political unrest as a potential cause of raw materials shortages.
But don’t panic.
Look, predicting global supply chains, especially of raw materials, is never going to be an exact science. And as a small business owner, you’re not well-served by spending all your time worrying about it. Just be aware of the top few causes and have raw materials shortages on your radar.
In the meantime?
Weekly Challenge:
Do you know the top few raw materials for which a shortage could strongly impact your business, and the top few risks that could cause a real or effective shortage for those materials? If so, great, you’re ahead of the game! If not, take a few minutes to research and then go back to living your life with a little more peace of mind 🙂
