Can You Run A Small Business Inventory Management Plan Responsibly?

You must realize that if you are running a small business inventory management plan that inventory management will not matter much when compared to generating solid revenue, raising money for projects and the like. But it should matter, because without proper inventory control your profits in the long run can be walking away from you!

With effective planning you will find that to run a profitable business with solid revenues you will need these following guides to make it in this fast paced business world today.

When you start to think of inventory as cash in transit every day that goes by that your product is not being sold guess what happens to your profit margin? That is right, it is up in smoke! So lets take a look at some key techniques that will get your inventory back on track.

Everyday you have inventory on hand your profit will shrink because unless your dealing with whiskey or wine it will take a lot of utilities, insurance and interest to carry it in stock. So it is then a good idea not to carry much inventory on hand, but you will have to have it made available if there is a rush on your product consistent with an ad campaign or sales promotion you might run.

To run a proper small business inventory management plan effectively you will need to negotiate with your suppliers to perhaps extend payment plans. You could also talk to them about doing drop shipments. In this case you would not need to have but a minimum amount of inventory if you can have your suppliers send out your orders for you.

When dealing with inventory management the old saying cash is king applies oh so very well here. You need to finance your inventory payment terms on a longer term basis than you extend to your customers. Example: Take 90 days to pay off your inventory to your suppliers and only give your customers 30 days. Can you see the obvious advantage?

To keep your inventory fresh you need to keep it moving with your small business inventory management plan. Product can be dissipated with special sales, unique discounts, 2 for 1 deals, etc. By using proper computer software that fits your needs you will be able to track accurately the ebb and flow of your product. Employee theft, breakage, clerical errors can all be tracked with the proper technologies and techniques. You will then be able to write off the losses on the business.

Be proactive about your small business management plan because it can be the lynch-pin that spills you into profitability, it is the key to solid business practices. Without it you do not have a handle on what your inventory is doing, how fast it is coming and going, or where your future will be in 6 months to a year. Get a handle on it and your small business will hand off the profits to you big-time.

May God Bless You!

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