Managing your stock and inventory is a key part of running a good business. Your aim is to always have the right products in the right quantity for sale, at the right time. When you do this effectively, you can reduce the costs of carrying excess stock and inventory while maximising sales.
Manage your stock and inventory
By managing your stock and inventory well, you can ensure that you have the right products in the right quantity; avoiding products selling out, wasting resources by producing products that may spoil or may not be sold; and/or funds being tied up in holding excess stock and inventory.
Managing your stock and inventory will help you protect your cash-flow.
Here are some questions you can ask about your stock inventory to help you get the best results.
Which products represent 80% of your business’ revenue?
- Talk with your Many Rivers business coach about doing some analysis on which products are the most profitable for you.
- Understand how long it takes from when you purchase stock and inventory and when your customer pays you.
What are your best sellers?
- Right now, people are buying different things to what they were 6 weeks ago. How have your customers buying habits changed?
- Many markets have moved and changed a lot– have you and your business kept up with these changes?
What can be done to reduce stock and inventory costs without sacrificing the quality of goods or inconveniencing customers?
- Is there extra packaging that you and your customers don’t really need but that adds to your costs?
- Do you pay for postage costs and may be able to save by having it delivered another way?
- If you stock is perishable, are you tracking how quickly these items are ordered to ensure they are sold in time to avoid having to write the stock off?
Have you ordered too many of an item that is not selling?
- A lot of business owners become used to just putting in their “standard” order. Maybe it’s time to have a fresh look at what is in that order?
Charles Fisher, Many Rivers local business coach in Townsville says, “consider sale prices on older stock to move it on and create cash-flow”. Use the cash you generate to improve your cash-flow position or to buy stock and inventory you know will sell quickly and at a profit.
Can an item be sourced somewhere else at a better price?
- Did you get a great deal on stock and inventory when you first started but haven’t compared prices since?
- Has the price been increased gradually over time and you just accepted it?
- Maybe it’s time to seek some fresh quotes from alternative suppliers or even ask your suppliers to give you loyalty or volume discounts.
Thinking about how you can manage your stock and inventory is always important, even more so now. If you are an existing Many Rivers client and have questions about the different ways you can manage your stock, please get in touch with your business coach, they are here to help. You can click here to read a summary of the top tips to protect your business.
For new clients, Many Rivers is here to help people start small businesses and grow existing businesses. We are here to support you the whole way. Please take the Small Business Self Assessment and see if we are right for you.