How To Keep Track Of Your Inventory For Your Small Business
When you first started your business and were dealing with just a few products and the odd sale, keeping on top of your inventory would have been fairly easy. However, as your sales increase and your business grows – which is always great news! – it will become a little harder.
You know you are building something successful as the sales keep coming in but you will no doubt need to change the way you are keeping track of the inventory to avoid any errors and the stress that comes as a result of that.
So, whatever product you are selling, here’s how to keep inventory for a small business.
Tracking your inventory
We’ve broken this down into four main parts:
- Ordering (and potentially making) stock
- Storing that stock
- Selling stock
- Tracking your stock levels
You may have started your business with piles of products on the floor of your spare room and a simple spreadsheet to keep track of what stock has sold and what you have left. But, as your business grows, the way you track your inventory needs to grow with you. So, where do you start?
Keep an eye on your stock
You need to continuously track what stock you actually have. As well as knowing what products are available you need to ensure you aren’t losing out because you are constantly running out of your best-selling product while over-buying or making a product that isn’t selling as fast. This becomes even more important if you are selling perishable goods.
You need to know your ideal stock levels – this means the minimum amount of product you need at all times. This will differ across your range and significantly from your most to least popular items. You can start to work this out by looking back and analysing your sales.
As well as looking back on how your sales have done historically, it’s also important to look ahead. You need to forecast the demand for your product. This won’t be entirely accurate, of course, but there are various ways to do this.
Depending on your product, sales may go up during the summer or around Christmas, for example or perhaps you are planning a promotion. You can also look at market trends. This will give you an understanding of the products that are likely to start selling faster.
Invest in inventory management software
Inventory management software will help you keep track of your products at all points of the supply chain. It will take the guesswork out of knowing when to order stock and how much to order.
You can use barcode scanning which will connect to this software and track your products as they come in and go out, giving you an accurate view of stock levels and ensuring you know exactly when your bestsellers are about to sell out so you can avoid disappointing your customer and missing out on a sale.
It’s an expense but will ultimately save you money in the long run and make your life much easier.
Count your stock
Even with this software, it’s a good idea to do a stocktake yourself at least once a year. This means actually going through the products, checking what you have and making sure it matches up to what you think you should have.
The end of the year is the perfect time to do this. While this is the time to go through everything in detail, you may also like to do a couple more throughout the year, just to make sure everything is as it should be and you are on top of any issues that might have been missed. This could be a cycle count to make it easier, which means you just check one product at a time.
Have a dedicated storage space
To help keep on top of stock and inventory, you need a dedicated storage space.
A storage unit is a perfect place to store your products and you can use a shelving unit to make the most of the space. This means that everything is in one place and can be organised neatly and labelled.
If you sell clothing this might be by item and then by size. Then, when you sell a product, you know exactly where it is and don’t need to spend time searching for it. Put the popular items near the front, as these are the ones you will need to access the most.
Depending on your product and whether it has a use-by date, you need to ensure you are selling them in the correct order and this will help you to do that too as you can put those products at the front or top of the pile.
Keeping track of your inventory is easier than you might think. You just need to remember that, as you grow, you’ll need to change the way you do it to make it as streamlined as possible.