If you’re looking to grow your goods-based business (or help your client grow theirs), start by asking these three questions.
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Your product inventory levels can often be a good indicator of how well your business is doing, at least in some ways. For instance, if you’re having trouble moving your inventory, it typically shows that you need to adjust your operations. You may need to reduce the items you offer or organize your inventory more efficiently.
Then again, if you don’t keep enough of the right inventory, you could be missing out on sales and market share. And even if you have the right products and enough inventory, if it isn’t tracked and organized, orders may be lost or delayed, which can affect your bottom line.
To grow your goods-based business — and keep it growing — nothing is more important than managing your inventory. To do that, start by asking yourself these three questions:
1. Are more workers needed?
When you’re having trouble tracking and organizing your inventory, it could be a sign that your staff is maxed out. Overburdening yourself or your workers rarely turns out to be a good thing. The solution? Start looking for qualified workers to add to your team so that your business can continue to grow.
Another sign that you (or your client) might need more staff is when your business struggles to fulfill orders — that is, you can’t physically get orders out in a timely manner. Obviously, this isn’t going to be good for business either. In this scenario, you may need more employees right away, which can be difficult to accomplish within a short time frame when you rely on traditional staffing agencies or have limited working capital. If this situation sounds familiar, look to on-demand labour staffing companies to quickly find skilled workers and consider other ways to increase your cash flow.
2. Can new technology help?
Technology can make a big difference in certain areas of your business. For example, using smartphone apps like Inventory Now and Shyp can help you to track inventory more efficiently and provide a better delivery/return experience for your customers.
Make sure you have enough staff scheduled by using an app like QuickBooks Time. This can take much of the grunt work off your hands so you can look forward to more accurate record-keeping, fully staffed operations and more productivity all around.
If you’ve decided to work with a marketing company to boost brand awareness, most likely they’ll point you toward social media. This is one of the best ways to increase interest and engage with your customers. It also gives you a way to offer a heads up when a favourite item is out of stock and when it will be back. When working with a marketing professional, you’ll want to share lots of information, such as photos, infographics, etc. To make short work of this, simply use a PDF file merger to ensure files are easier to share and send.
3. Do I have accurate stock levels?
Keeping the right amount of inventory is one of the greatest challenges of running a goods-based business. The first step is to stay on top of the supply-and-demand trends in your industry. Always look at which items are selling to give you an idea of where the market stands. Anytime you order new or additional items, make sure the reward outweighs the risk.
Many companies find it beneficial to calculate how much inventory they should carry by using the inventory turnover ratio. In short, this formula can show you the rate at which you’re selling out of stock and reveal the strength of your sales. Moreover, whether the ratio is low or high can tell you whether you have too much or too little inventory.
Funding your inventory management strategy
Managing your inventory is critical when it comes to growing your goods-based business — and you may require more working capital than you currently have available. Once you’ve identified the areas of your inventory management strategy that need updating, you’ll need to determine how to fund the necessary changes.
That’s where Liquid Capital can help! With our alternative funding solutions, such as invoice factoring or purchase order financing, we help business owners unlock working capital to support their business growth plans.