Continually evaluating your start-up or small business is essential for it to run properly and efficiently. One of the main areas of concern is inventory management. Does your business have the proper inventory management and the correct amount of products on hand?
Keeping track of your inventory is an essential part of running a start-up company or small business. Proper inventory management systems will prevent loss of sales due to out-of-stock products. It will also prevent having too much inventory on hand.
Below we will look at good inventory management techniques and practices.
Why is Inventory Management Important?
Inventory management will keep the products you need in your inventory and maximize your sales without having an excess of products. This will avoid the loss of sales from products being out-of-stock and business capital tied up in the excess product. It will help you only keep the products you need and reduce the number of products you don’t need.
The proper inventory management techniques will reduce your operating costs, improve the cash flow of your business, and your company’s bottom line. It will assist you to prepare for future demand for products to prevent shortages without having products that aren’t needed. It will also enable you to organize products in storage and reduce the employee hours need to concentrate on the back stock in your storage area.
Inventory Management Practices
Below is a list of inventory management practices start-ups and small businesses should follow.
You need to be able to accurately predict what items will be needed to ensure maxim sales in the future.
Rotating stock in your inventory is essential to sales, especially when dealing with perishable items. FIFO will ensure the product is sold in the order it was purchased and not allowed to remain in the back room.
- Auditing and Stock Evaluation
You should count all the inventory of your stock regularly to ensure that the inventory management techniques you are using are accurate. You should also remove slow-moving or non-selling items from your inventory.
- Using Inventory Management Software
Inventory management software will help you view and track your inventory in real-time. It will automatically adjust the inventory levels every time there is a sale made or products are used.
- Consider a Full-Time Inventory Controller
If you have an excessive inventory you may need a dedicated person who is responsible for purchasing, receiving, and ensuring the inventory levels are correct.
Proper inventory management techniques are essential for reducing costs for your start-up or small business. Being able to properly forecast sales will keep the products you will need in your inventory and reduce products that you do not need.
Rotating your stock and periodic evaluations will ensure that the quantity you have on hand matches your reported inventory levels and that product is not sitting in storage for an excessive amount of time. It will also help you remove any products or inventory that is slow-moving or not selling at all.
Authored by Kyla Stewart, Chief Editor at The Blog Frog