Knowing what moves in your business your trading stock
Trading stock planning of your inventory is vital as we move more and more to an online need-it now environment
There is no excuse as to why you, as the business owner, don’t understand your small business’s ins and outs. Not just your profit, but I am taking stock. The stuff that sits on shelves and in boxes in your business The stuff that moves. The inventory that collects dust and hasn’t moved in twenty years.
How often do you hear small enterprises say we never got that sale as the customer couldn’t wait.
Sometimes planning when to buy or hold and sell stock requires you to make decisions based on accurate data in your system. Getting it right is a good use of your businesses resources and doesn’t tie up unnecessary dollars in inventory.
Online shopping is forcing the consumer to want it now. Deliver it to me today; otherwise, I will google another supplier. Taking action around your trading stock is why stock delivery and the life cycle of your inventory is essential.
Let’s look at what you can do to make your profits grow with better stock delivery!
Obsolete and unwanted product! and trading stock
We all do it and have it. Dust collectors. Stock that sits in boxes gathering dust. This stock may have been a best seller 20 years ago, but now no one wants it. It also could be an embarrassing purchase decision you now regret.
Make room and get over it. Sell it at the local market or discount it heavily. Move it one and worst-case scenario turf it or give it to charity. Take a hit and use the space and any money you get into better uses
Old stock that was once the big seller!
Get this stock back to the drawing board. How many times do you see an extensive corporate refresh of an old product with a new, improved version? Please do the same and talk to the customer as to what they like.
Stock that moves record it correctly!
Stock delivery is about tracking stock. Your cloud accounting software will mean if it is set up correctly, then the information allows you to make the right decisions. Make sure you have accurate data around your stock then you know precisely what you have.
Those businesses that don’t do a stock take annually or even more frequently have no idea if the computer widgets are the same as those on the factory floor.
Know what stock is available, lead times for reordering when you are running low and know when you need to make more or buy more to meet seasonal demand. Many small businesses have a gut feel but its surprising that as an adviser that when you visit a clients factory the same stock hasn’t moved each time.
Take the time to review your stock delivery process. Track stock as you make a sale. Is the sale recorded properly for both taking it off the shelf and warranty issues? Along with stock control is margin pricing, but that’s a whole other topic.
Stock ordering takes time. How often has a small business ordered way more than they need because the stock is accurately being recorded? Stock can expire, and knowing when to have a campaign around stock movement before it expires means the business keeps cashflow moving
Stock delivery is about having accurate information at your figure tips so that you know when you run out of something, how much you make and ultimately having the cash freed up in the business and not sitting on the shelf gathering dust. Too much trading stock and low turnover impacts on working capital
Of course, keeping track of your trading stock helps when it comes to meeting your ATO obligations
Gartly Advisory help many small business clients manage their working capital and stock flow. Contact Geoff to discuss your needs