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So many businesses run into this problem. They order massive quantities, thinking that things will hit off right away, but that is rarely the case. Sitting inventory is sitting money. Then comes the problem-solving stage. We start asking ourselves, "Can we repackage the product, set a relaunch date?!"
We can easily prevent these mishaps by consistently keeping track of product quantity and value. Look at your overall budget and funding to balance the demand of inventory with your conservative judgment. At the bare minimum you should be tracking your inventory numbers monthly, if not weekly.
Number of inventory received.
Number of inventory on order.
Number of inventory that went out.
Value of inventory at the start and end of each month.
That being said, let's talk about inventory management systems. If you currently do nothing to keep track of your inventory numbers, that means you do not have a system. Nothing equals no system!
You may have heard of different accounting and inventory software such as Microsoft Excel, Quickbooks and bigger enterprise resource planning (ERP) systems. These systems work best for different stages of business.
Excel spreadsheets are great for starting out. Set out to track your numbers weekly, separating each item by number and description. Click Here to get a free template you can adapt for your specific needs.
When you are confident that your business and production is up and running more smoothly, consider getting a point of sales system such as Quickbooks or Sage Peachtree. These systems are great because they can track your sales, inventory and run reports on them.
An enterprise resource planning (ERP) system keeps track of production capacity, orders, sales and cost across various departments of a company. This kind of complex software is ideal for large businesses and corporations. These full-blown, elaborate systems are not practical for small, growing businesses.
The right thing to do is to have a small order to fill in the gap and smooth out your transition. Keep in mind that you should definitely check the prototypes and quality of the new items from your new factory before you completely switch over to doing business with them.
When you start multiplying your inventory count by the cost per unit, you really get to see the big picture. Instead of seeing inventory count, you start to see its monetary value. You want to avoid having too much of your business's funding in inventory, so always keep track of your inventory quantity and value.
Learn how to manage your inventory before it's too late! Listen to the complete Power Coaching audio below:
Come take a look at Entrepreneur Magazine's May 2015 issue! Products To Profits was quoted a bunch of times in this article!
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