Succeed As Your Own Boss

ENDING SMALL BUSINESS FAILURE

  • Home
  • About
  • Book Melinda
  • Consulting
  • SBL Store
  • SmallBizLady University
  • Free Tools
  • Podcast
  • #Smallbizchat
    • Be a #SmallBizChat Guest
  • Blog
  • Contact
    • We’re Hiring!
You are here: Home / Melinda Emerson @SmallBizLady / Out of Control Inventory Will Kill Your Small Business

Out of Control Inventory Will Kill Your Small Business

June 27, 2016 By Melinda Emerson Leave a Comment

Feel free to share...Share on facebook
Facebook
Share on twitter
Twitter
Share on google
Google
Share on linkedin
Linkedin
Share on pinterest
Pinterest
Share on reddit
Reddit
Share on email
Email
Share on print
Print
Inventory management ensures your business has the right products in the right quantities at the right time.

Inventory management ensures your business has the right products in the right quantities at the right time.

If you’re a business owner, you’re going to get plenty of business advice about cash flow, staffing, and just plain having the drive to keep going when things are tough. But you simply cannot ignore practical issues like inventory management.

 

For one thing, your business pays taxes based on inventory, so if you were audited, you would be faced with proving which records in your books are accurate, both for quantity and cost. Inventory values and product costs are essential for understanding your profit margin. And inventory management will keep you on top of damaged or lost inventory. Here’s some basic business advice about inventory management.

Common Inventory Mistakes

Knowing the most common inventory mistakes is a good first step to preventing them in the first place, and recognizing them quickly when they occur. Some of the most common inventory mistakes are:

  • Having too much inventory – If you’re afraid of being caught short, you can go overboard, which consumes capital and erodes profits. Plus, warehousing has associated costs, and aging inventory can be difficult to move. Track how often your inventory turns around so you can learn exactly how much to order and how frequently.
  • Haphazard inventory tracking – Miscounts can happen during receiving, order fulfillment, and, unfortunately, through employee theft. Barcode scanning and daily random inventory checks of the record versus product help. Also, keep inventory physically secure with alarms and RFID tags, and limit who can handle inventory.
  • Considering all inventory as equal – Triage is essential, because tracking everything at all times can be impractical. Focus on the 20% of your products that sell most when checking inventory, forecasting, and reordering. Next in importance are the middle 30% of items, while the lowest selling 50% of your products do not need to be tracked as tightly.
  • Not investing in inventory software – You can use spreadsheets, but the potential for error is enormous. Besides, inventory tracking that allows multiple people to work with inventory simultaneously is widely available. Today’s software provides you with a central database, powerful tools, and mobile-friendliness, so your team can work inventory using tablets.
  • Not making a backup plan – Just as you should regularly and securely back up accounting data, you should back up inventory data. A natural disaster or burglary could undo all your hard work in an instant if you don’t plan for the worst case scenario. Some inventory software packages have automated back-up capability built right in.
  • Have multiple sources for inventory – If black Friday or Small Business Saturday are your major selling times, be sure that you have at least two back-up vendors to get your supplies. The worst this you can do a holiday time is tell your customers their orders are on back order.

Steps in a Good Inventory Management Process

The first step in solid inventory management is assessing what you have and tracking how quickly your products turn over. Depending upon your storage space, delivery costs, and how well a product sells will determine how much you need to keep on hand. For best sellers, factor in volume or shipping discounts for large quantities.

Define a minimum stock level and reorder whenever that level is reached so you don’t risk running out of a product. When calculating minimum stock level, consider reorder lead time. A first-in, first-out approach to keeping goods shelved is advisable, and if you can track products through your point-of-sale system, you should.

Find The Right Point-of-Sale System (POS)

 

An outstanding point-of-sale (POS) system is like having behind-the-scenes personnel helping you manage inventory better. When your POS has barcode scanning and inventory management built in, it will automatically deduct products from your inventory as they are sold, so you don’t have to do this manually.

Some POS systems alert you when stock of certain items runs low, and will even complete purchase orders for you, saving you considerable time. These systems can track your best-sellers, so you can always have enough without stocking too much inventory. Some systems even incorporate customer loyalty programs that can strengthen customer relationships.

Develop An Inventory Control System

A full-time inventory manager is a luxury many small businesses can’t afford. Fortunately, technology can step in and take care of a lot of the repetitive work. However, it may be worth your while to work with an inventory control consultant who can help you map out a sensible inventory control strategy and system to gather the tools you’ll need to carry it out. When you create your inventory control approach with the help of an expert, you can be more confident in the accuracy and management of your inventory and records.

If you’re interested in more business advice to help you keep your company on the path to success, I invite you to sign up for my weekly newsletter. Let’s move forward with you business success.

 

Feel free to share...Share on facebook
Facebook
Share on twitter
Twitter
Share on google
Google
Share on linkedin
Linkedin
Share on pinterest
Pinterest
Share on reddit
Reddit
Share on email
Email
Share on print
Print

Filed Under: Featured Post, Melinda Emerson @SmallBizLady Tagged With: inventory control, small business

Fix Your Business Now!

Order SmallBizLady's new book Fix Your Business, 90-Day plan to Get Back Your Life and Reduce Chaos in Your Business. It includes the 12 Ps of Running a Successful Business and readers will finish the book with a new strategic plan to take their business to the next level.

About Melinda Emerson

Melinda F. Emerson, “SmallBizLady” is America’s #1 Small Business Expert. She is an internationally renowned keynote speaker on small business development, social selling, and online marketing strategy. As CEO of Quintessence Group, her Philadelphia-based marketing consulting firm serves Fortune 500 brands that target the small business market. Clients include Amazon, Adobe, Verizon, VISA, Google, FedEx, Chase, American Express, The Hartford, and Pitney Bowes. She also has an online school, www.smallbizladyuniversity.com, that teaches people online marketing and how to start and grow a successful small business and publishes a blog SucceedAsYourOwnBoss.com. Her advice is widely read, reaching more than 3 million entrepreneurs each week online. She hosts The Smallbizchat Podcast and is the bestselling author of Become Your Own Boss in 12 Months, Revised and Expanded, and Fix Your Business, a 90 Day Plan to Get Back Your Life and Reduce Chaos in Your Business.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Let’s Connect

  • facebook
  • instagram
  • tiktok
  • pinterest
  • linkedin
  • twitter
  • youtube
  • feedburner

Sign up for the SmallBizLady BUZZ Newsletter and be the first to receive updates and details about upcoming events:

We’re proud to be part of the Mediaplanet Empowering Small Business campaign! The COVID-19 pandemic brought hardship and ruin on the nation’s small businesses, but there’s now reason for hope. Learn about the resources, support, and tools available to help your small business bounce back and grow stronger than ever by picking up a copy of the campaign in USA Today and reading it online here.

Get a FREE Chapter of SmallBizLady’s Book,
"Become Your Own Boss in 12 Months, Revised and Expanded"!

Become Your Own Boss

Most Popular Posts

>Seven Ways to be More Profitable in Your Small Business
> 7 Ways to Attract Customers to Your Small Business
> 6 Tips for Managing Small Business Finances
> How to Run a Successful Multilevel Marketing Business
> 10 Ways to Grow Your Small Business With Instagram
> How to Sell on Facebook
> How to Get Over the Fear of Starting a New Business

Featured Videos

Bloomberg News Interview
How to Support Small Businesses During the Holidays

National Speakers Association
Winter Conference

Fox 29 Philadelphia
'Small Biz Lady' gives best advice for starting a new business in the New Year

Fox Business
Starting a Business

MSNBC
The importance of job mentoring for women

#SmallBizChat Live
National Small Business Week: Q&A

Good Day Philadelphia
Expert Shares Tips on How to Become Your Own Boss

Testimonials

Become Your Own Boss is a must read if you’re thinking of launching a business of your own.
Jean Chatzky, Bestselling Author of Money 911 and Financial Editor of NBC’s Today Show
Great step-by-step advice for anyone looking to start their own business.
Andrew C. Taylor, Chairman, Enterprise Rent-A-Car
Melinda Emerson has written a remarkable book. It is essential reading for anyone seeking to make the transition from working girl to successfully working it, as an entrepreneur.
Cynthia McClain-Hill, Past President, National Association of Women Business Owners
The perfect companion for those planning to go out on their own. Melinda delivers firsthand practical advice on how to be the successful entrepreneur. Read it if you want to get it right the first time.
Kenneth L. Shropshire, Professor at the Wharton School of Business, University of Pennsylvania
If you are looking for a versatile speaker who can talk about how to grow small businesses or get started with social media, look no further.
Heather Van Sickle Executive Director, National Association for Community College Entrepreneurship (NACCE)
Her wit and depth of subject knowledge were entertaining and empowering. Melinda is definitely on our short list of seasoned entrepreneurs and business leaders we look to invite back in the near future.
Tennille M. Robinson Senior content & Event producer for Inc. magazine
Melinda Emerson, “SmallBizLady,” is an engaging and witty speaker and a great addition to any conference. Her terrific presentation and compelling delivery give people the information they need and want to become their own bosses and grow success… Read more
Laurie Dalton White Conference Director, Pennsylvania Conference for Women
Melinda Emerson has been a fantastic small business and social media resource for the Pitney Bowes team. Not only is she personable and easy to work with, but she also has an innate understanding of the small business audience. My marketing programs … Read more
Justin Amendola, Former VP, Global SMB Digital Strategy, Pitney Bowes

Latest #SmallBizChat

The SmallBizChat Podcast: How to Turn Your Divine Gifts into a Business with Michelle Kopper

In this episode, Melinda Emerson engages with Michelle Kopper to explore her entrepreneurial journey and how she overcame fear to succeed. Michelle delves into the role of divine gifts and spirituality in business, offering insights into integrating personal beliefs with professional goals. The conversation addresses imposter syndrome, providing strategies for validation in the market. Michelle […]

Fix Your Business Q&A Video

Recent Posts

  • The SmallBizChat Podcast: How to Turn Your Divine Gifts into a Business with Michelle Kopper
  • How Smart Nonprofits are Building Recession-Proof Revenue Streams
  • The SmallBizChat Podcast: Hit It and Quit It with Mitch Axelrod, Dr. Dan Young, and Rich Trotter
  • 50 Best Free Apps for Small Business Owners
  • The SmallBizChat Podcast: How to Reinvent a Legacy Business with Rich Trotter

#SmallBizChat

  • SmallBizChat Archive
  • @SmallBizLady

Business Advice

  • How to Start

SmallBizLady Store

Products

Free Chapter

Get In Touch

  • FAQ
  • Be a #SmallBizChat Guest
  • Contact Us
Copyright © 2025
Quintessence Entertainment, Inc
PO Box 280
Drexel Hill, PA 19026
(610) 352-0680
Privacy Policy · Refund Policy

Let’s Connect

  • facebook
  • instagram
  • tiktok
  • pinterest
  • linkedin
  • twitter
  • youtube
  • feedburner