Jamie SutherlandIf you own a service-based business like a barber shop, yoga studio or even a pet salon, it’s likely that you also sell a selection of products to your customers. Keeping track of this inventory and knowing when to reorder your customers’ favorites can be a bit of a headache. Thankfully, there are a few affordable solutions and best practices to help you better manage and maintain a profitable inventory.
Use more efficient tools
Excel spreadsheets just don’t cut it anymore. Circular references anyone? What if you lose that file? Cloud-based solutions do away with these issues completely by keeping your data safe and secure in the cloud and updated with real-time information. Cloud-based solutions even sync inventory with accounting to provide the most up-to-date information available so you can make quick business decisions, like whether to discount stock that’s not selling.
Get your staff involved
If you share the inventory duties, be sure to meet with the team. Talk to them about the pain-points they encounter and what issues typically occur. To best control inventory, it may be helpful to designate a select group of people to purchase product. Having your finger on the pulse greatly helps you regain a sense of control and maintain an organized approach.
Track items and monitor quantity on hand
Don’t be a victim. Retailers lose $ 40 billion due to inventory theft by employees. Inventory monitoring is more beneficial – and less of a headache – if you do periodic inventory evaluations on a monthly or quarterly basis. Make note of fast-moving items and run regular reports to monitor your stock levels. This ensures that you never run out of high-demand items. By taking more of a routine approach to inventory management, you better identify trends in losses and more accurately determine the amount of unsold product.
Price appropriately
One of the reasons you may run into a surplus is that you’re not pricing your goods appropriately. Look at your reports and review the cost and selling price for each item. Conduct research on Amazon and other retail sites to get a feel for current market rates. Online retailers undercut their prices because they don’t require the overhead of a brick-and-mortar store, so adjust pricing to your specific needs. Also examine slow-moving items and offer them for a discount to your customers. This keeps the revenue stream moving and prevents your products from going stale. Remember: Stay competitive but don’t forget to balance that against your inventory demands.
Forecast with the help of an advisor
By analyzing your data, you can see trends over time, gauge when losses are likely to occur, and identify the seasonality of your business when it comes to inventory highs and lows. Don’t be afraid to seek the help of an accountant for a second opinion. Accounting advisors can help you leverage your data to plan through the inventory cycle effectively and profitably. They provide strategic guidance for your small business inventory while also considering other daily financial aspects like payroll and overhead costs. Don’t try to do it all yourself – get some help from the pros.
It’s time: Handle inventory like an expert
Though you may not have the budget for an expensive, full-scale inventory management system – you can still manage your inventory in a smart and effective manner. Taking these steps helps you to handle inventory like an expert.
Learn more on how to efficiently manage your inventory with our small business guides.
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