Starting a small
business is a pretty impressive feat. There are many factors to consider. As a
business grows, many business owners will find it necessary to maintain
inventory whether it is in the form of supplies or retail equipment for
finished products. If you are organized and diligent then an uncluttered
inventory keeps the supply management under control. Maintaining an accurate
inventory is critical to the success of a small business.
However, if you have
limited capital and space, you need to have products that you can stock and
keep track of your inventory as your business grows. We’re looking for smarter
ways to make small business inventory management easier.
These tips and tools
are intended for small businesses and can help any overworked owner or manager
create a harmonious work environment and manage inventory effectively.
1.
Clear out old, unused inventory.
Step one: Reduce your workload by throwing out what
you don’t use. After investing money in your new business venture, you may be
afraid to throw something away in case you ever need to use it again. Enough –
every penny you spend should be used towards your end goal. If your workspace
is cluttered with supplies that you no longer use and products you no longer
sell, it’s time to clean it out. If you have office equipment such as a
computer that will reduce your taxes make sure your accountant knows what
you’re keeping and what you’re throwing. Record inventory adjustments for
reasons when you dispose of or donate existing inventory. This extra step
saves you time upfront but reduces the time you spend updating inventory
because you don’t have to count items you don’t use.
Follow these two
simple rules:
Get rid of anything
you haven’t used in six months or sold in a year.
Follow a strict
rule... The new product does not arrive until the old product is worn out.
2.
Track best sellers
first.
Most small business
owners agree with the 80/20 rule. 80 percent of your sales are only 20 percent
of your business. This means you will have a few things that are great money
makers for you and your small business.
If you’re doing a
manual inventory, it’s wise to start with the elements that sell the fastest.
Your bestsellers will be sorted faster when you have fresh eyes and match the
numbers on the shelf.
Put these bestsellers
in the front when you have them. It’s important to keep these best-selling
items with you and not at the back of your storage unit. You can set up a
bookcase in your office or garage to store these items (if the HOA allows if
you work from home). This way you can access them quickly while keeping your
office area free of excessive clutter. You also keep them in storage so you can
fill them when your office or home supplies are low.
3. Keep your inventory organized.
Small business
inventory management systems don’t have to be complex and inefficient. They
should serve you by saving time and thus saving money. For example, an antique
shop that sells random items will need a more specialized management platform
than a company that sells the same product over and over again.
First make sure you
have a system in place to manage your store inventory.
· It’s easy to find products by category in one
place.
· If you store items in boxes, you can simplify
inventory management by placing digital images of items outside the box. Stock
keeping unit (SKU) number labels also help you tag and track your inventory.
4. Separate business and home with a virtual
office.
Many small businesses
are operating out of home offices and workspaces. However, as your business
grows you may be tempted to combine work and home life for leisure or
convenience. This mistake can be costly due to the time tax.
Take Martha who runs a
soap-making company from her home. She uses her work phone to make personal
calls and buy supplies for her business and home. Sometimes she takes soap from
stock and uses it at home without tracking it. This combination of capital and
inventory can be expensive if it combines the business with personal expenses.
The more you can do to
separate your small business inventory and operations from home life the
better. But what does this mean from an office perspective?
If you don’t have the
budget for an office, you can make your home office more efficient by setting
up a virtual office. For a monthly fee you can set up a direct recipient
dedicated business phone number to answer corporate business address phone
calls for all your mail and pack a personal voicemail box and even a fax number
that converts to email. The more you can separate home from business the less
likely you will be accused of mixing personal and business funds and referrals.
5. Find useful inventory management apps.
Not every small
business has the money to install expensive warehouse management software.
However, there are apps that let you manage your portion digitally without
breaking the bank.
Here are some popular
inventory management apps:
· Sortly
· On Shelf
· Delivrd
· Inventory Tracker
· SOS Inventory
· Cashier Live
Prices range from free
to over $100/month depending on what features you want and how. As your
business grows and your needs change you may need to change your inventory
management technology.
6. Move business inventory off-site.
If your office space is
filled with too much inventory you won’t be able to get work done efficiently.
Moving those items out of the office and into self-storage units is a simpler
and often more affordable solution. You might think why not use my garage? Not
so fast. Many homeowner associations prohibit residents from using their sheds
to store inventory. Although there are no restrictions most people prefer to
use their garages to keep their vehicles. Most storage space costs much less
than commercial warehouse space. As your business grows you can authorize
others to take things from the warehouse without giving them the house keys and
you can always move to a larger unit if needed.
7. Hire outside help as your business grows.
If you sell thousands
of items at once and are going through a large moving inventory sometimes it
makes sense to hire a third party to keep things organized. It is very
important that inventory tracking does not become your full-time job. This way
you can spend time on other integral components of growing your business.
Entrepreneurs are
tired of trying to manage sales updates of social media platforms filing
quarterly tax practices of inventory management and balancing accounts and
books. When your business reaches an unexpected phase of growth there is a lot
for one person to manage.
Make a list of things
you want to keep doing yourself (or things you actually have time to do). Then
determine the type of support staff you need to do the rest of the work.
Depending on the cash flow you have you can hire part-time or full-time
employees or you can hire independent contractors.
We hope that this
article has inspired you to improve your small business inventory management
system. Sometimes it just takes a little planning and organization to get
started. It’s good to use these habits when starting a business but it doesn’t
take long to fix a system that isn’t working for your business.