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Ordering, storing, and maintaining inventory can be one of the most tedious and difficult-to-manage tasks for small business owners. It’s a juggling act to have enough inventory to supply the demand while maintaining costs, keeping track of what is brought in, and keeping the stock safe. Depending on the type of business owned, inventory management methods will vary. But all business owners have basic inventory needs that need to be met if they are to build a good foundation.
Every challenge cannot be overcome, but with some planning, many can be avoided. Let’s discuss some ways you can proactively try to prevent some of the common mishaps that come along with inventory management.
As inventory rolls in, it’s important to know what you have, the quantity, the expiration dates, where it’s located, and how you’re selling it (online, in a brick-and-mortar store, and/or at markets and conferences). Here are a few methods you can use to keep track of your inventory:
Basic pen and paper — For many, writing it out and having a physical copy in a notebook is the easiest way to manage inventory. Studies also show putting pen to paper helps people remember and process information better.
Excel spreadsheets — Developing your own method and having the ease of updating and being able to use formulas that will automatically update as numbers change could prove to be easily manageable.
Software — Companies have developed software to manage inventory that makes it easy to keep track of all you have going in and out. They range from free (though these are limited in tools) to specialized particularly for your business.
For many small business owners, the more difficult part of managing inventory is how and where to store it. It’s imperative that inventory does not go to waste by getting spoiled or damaged. It’s also essential to have enough storage that your business is able to have inventory on-site to meet the demands of customers.
Trying to store large amounts of inventory in small spaces can result in damaged, lost, or forgotten goods. If you have available outdoor space, you should consider installing a free-standing steel building to house your inventory. Not all steel buildings are created equally, and not all will serve your purposes. Explore the different steel buildings to determine what kind of frame you need.
Murphy’s Law: Things Will Go Wrong
Inventory management is a crucial part of owning a small business, but sometimes things go awry. This can happen especially when something was inaccurately entered at the data entry point or items were stored in the wrong place. Here are some other things that can cause your inventory to spoil or be unaccounted for:
Wrong labeling or tag
Too many items ordered
Inventory not tracked as sold
An unorganized stock room
Unaccountability with staff
Sometimes the wrong inventory is sent to a customer. In that case, you may show goodwill and build rapport with clientele by gifting them the item. Other times, inventory becomes obsolete or outdated. While you should take steps to reduce the frequency of these instances, remember that you can expect them to happen from time to time.
To avoid the common inventory pitfalls that plague small business owners, it’s important to order inventory correctly, log it as it comes in, store it properly, and keep a running log. Though mishaps are bound to happen (you will under- or over-order, stock will occasionally be misplaced, and the wrong item may be shipped to a customer), you can mitigate losses. With a management system in place, you will see less issues than if you had no plan at all.
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