How To Manage Inventory For Small Businesses

INVENTORY MANAGEMENTTHE SMALL BUSINESS OWNER’S GUIDE

It will help you know what is coming into your store, what is leaving it, and how much money you are actually making or losing on those items.

Small business inventory management is an important part of retail success.

The Stock Room You need a place to do inventory and you need to make sure it is set up and used correctly.

Receiving and Counting System Standardizing the process for product deliveries and regular stock checks.

The POS System You need technology that makes inventory management easier.

The Three Components of A Successful Small Business Inventory Management

Setting Up YourStockroom and Labeling Your

Product

If you don’t have a stock room you are going to have to buy in

smaller quantities.This will cost you more than

buying in bulk, and your storefront will likely become

messy, crowded, and unprofessional.

In order to have a successful stockroom you must:✓ Plan out your space ✓ Determine the right shelving for your products ✓ Develop a consistent system for labeling and organizing your

products.

Planning Your Space

If you don’t draw up a plan for your stockroom, you will run into problems.Your shelving might not fit or similar products could end up in all different places, making re-stocking a much longer and harder process.

Grab a piece of paper and sketch out your room dimensions.It seems obvious, but you have to make sure your potential shelving, inventory, etc fits into your space.

Planning your space

Grab a list of your inventory.With a list handy, there is much less of a chance that you will forget to include some of your inventory.

Planning your space

Planning your space

Determine where your products will go.Group similar items together and make sure that popular items are up front and easily accessible.

How To ChooseThe Right Shelving For Your

Stockroom

How to choose

It should fit your space.This is where your previous sketch comes into play. Measure your space and be sure your shelving fits.

How to choose

It should be adjustable.Regardless of what product you sell, you will probably need to change your shelving at some point to accommodate new or different inventory.

How to chooseIt should make it easy for you to find and keep track of your inventory.Your shelving should allow you to put your product front and center in an organized and clear way.

There are many places you can buy shelving. If you want to buy in person, then Home Depot, Lowes, or your local hardware store are good options.  If you would like to buy online Amazon has various shelving options.  You may also be able to find used shelving on your local Craigslist page.

Where to buy stockroom shelves?

How To develop A Consistent System

For Labeling and Organizing Your Product

Labeling and organizing

Unique Product DescriptionsGiving each product a unique description will make it much more likely that your shelves are stocked properly and your inventory numbers updated correctly. The best way to do this is to start with the noun that best describes your object and then add qualifying adjectives.

Labeling and organizing

Distinct Item NumbersFor items that do not have barcodes already, if possible, you want to print and attach barcode labels to those products as well. It makes it less likely that something will be recorded wrong and also automatically updates your inventory on your P.O.S system

Labeling and organizingKeep your units of measure consistentOne thing that often causes inventory problems, is when the units of measure you inventory with are inconsistent.

Establishing a System forReceiving and Counting

Inventory

Receiving Inventory

When you receive inventory from a supplier,there is a good possibility that there could be a difference between the invoice and the actual number of packages/items received. It is also possible that the item price has changed since you initially ordered the product.

You can check a list of steps on this in the main article.

Counting inventory can seem like an overwhelming task.Because of this, some small-business owners just put it off and never actually do it.

You can check a list of steps on this in the main article.

and Estimate Future Inventory Needs

Using Your P.O.S. System to Manage Inventory

“Your P.O.S system is your inventory

management system . . . a lot of

people get that wrong”When P.O.S. inventory management is used in conjunction

with periodic manual counts, you get a very accurate inventory count and can identify when things are stolen

much more effectively.

It is what you use to ring up purchases in your store. A basic P.O.S system includes a cash register or computer with cash drawer, a receipt printer (some newer systems email receipts), a barcode scanner, and credit card swiper. Many newer P.O.S systems also have great inventory management capabilities.

What is a Point of Sale (POS) System?

Using Your POS System To Manage InventoryMost P.O.S. systems can now: 1. Accept initial inventory

counts. 2. Print labels/barcodes

(for products that don’t already have them) 3. Scan Barcodes 4. Automatically update inventory counts when sales are made 5. Send a report when specific inventory is getting low

Managing Inventory1. Input inventory into your P.O.S. system as

soon as it gets moved off of the truck 2. Print labels for any items without

barcodes and then scan them into your inventory as well

3. Do regular counts and update your POS inventory if there are any discrepancies.

Estimating Future Inventory NeedsDo you struggle with ordering too much or too little product? If so, many P.O.S systems today have the ability to use previous sales history to estimate how much inventory should be included in your next order.

Shopkeep is one of the highest rated P.O.S. systems and has great inventory management features for only $50 a month. It allows you to easily add inventory, print labels, generate detailed sales reports and inventory ordering recommendations, and allows you to manage 10,000 SKUs via bulk import and barcode scanner.

Our Recommended P.O.S. System for Inventory Management is Shopkeep

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