Running your own business is a dream for many people. All the benefits of managing your own time, earning more, and generally creating a better work-life balance than being your own boss can give.
But if your business involves selling physical products, it is crucial to control your small business inventory, whether that is components or finished items for sale.
While inventory control is vital for the success of the business, storage facilities may be limited. Add to this the devastating effect that poor inventory control can have on your bookkeeping, and losing track of your stock holdings could spell disaster for your business.
So what can you do to keep control of your business inventory?
Organize your small business inventory
It may sound obvious, but storing your inventory in an organized way is the first big step. How much time you spend on this depends on the type of stock you have and the number of items of each type you hold in stock at one time.
Put similar items together and develop a system for identifying products. You can store items in boxes and use a Stock Keeping Unit (SKU) number to identify them. Keep best-selling products nearby or at the front of your storage for easy access.
Once completed, you should know what you have in stock, which products sell the quickest, and which products have been sitting on the shelf for too long. Plus, knowing what you have will prevent mistakes, such as selling something you haven’t got in stock and upsetting your customers.
Accounting and inventory systems will allow you to enter SKU’s into the system, linking your stock to your software systems.
Clear that wasted space
Now you have an organized inventory, you need to identify stock items that are taking up space. Products that you no longer sell, because they have been replaced by newer stock, faulty items that you intended to repair, but let’s be honest, they are not worth the time.
Separate the items into junk and saleable. Junk goes straight in the trash, but for the saleable items, you have a choice. Either a fire sale to make back at least some of the cost. Sell them as a bulk lot. You’ll be surprised how many people buy these sorts of items. Or maybe donate them to charity.
Whatever you do with the products, they will be out of your way!
Inventory management tools
The fully automated systems that integrate inventory control with point-of-sale (POS) and accounting software are generally out of reach of small businesses. But there are stand-alone products that can help.
SOS inventory integrates with the Quickbooks accounting package but does come at a monthly cost. If you have a high turnover of stock and use Quickbooks, this is worth considering.
Delivrd has a free inventory management app, but it’s limited by the number of products you have, and it doesn’t integrate with accounts or POS.
On Shelf is an inventory management system designed to run on iPads. It is cheap and includes several useful features, such as customer tracking.
Inventoria is a Windows-based system that can be bought for a relatively small one-off payment.
There are many more inventory systems out there, some completely free, so it’s just a case of finding the one that suits your particular business requirements.
Separate business from home
When you first start your business, your inventory will probably be small and manageable. But as your business grows, so does your storage requirements. If you are working from home, this is quickly going to become a problem.
You might think that using your garage is a quick and easy solution, but this may not be allowed by your homeowner’s association. Plus, most of us use our garages to store personal items, and if you are anything like me, it is already full!
An affordable solution could be off-site storage. Along with freeing up valuable space in your office, the extra room should allow you to get your business inventory properly organized.
Other advantages include the ability to use climate-controlled storage, give 24/7 access to a colleague without giving them your office or home keys. When you outgrow this storage unit, it’s easy to obtain more space.
You can also claim it as a business expense to reduce your tax liability, so it really does make sense.
And finally …
Hopefully, this short article has inspired you to take action and get your business inventory into shape. It will reduce your stress, make your business run more smoothly, and prevent mistakes that could cost you, customers.