If you’re a small business owner, you know that keeping track of your inventory is the key to ensuring that everything runs smoothly behind the scenes. After all, if you don’t have the necessary supplies to meet your customers’ demands, your cash flow will suffer.
Whether you’re running a small jewelry shop through an online retail platform, selling crafts and décor every weekend at your local farmers’ market, or shipping out your own line of workout gear, mismanaging your inventory can set you back financially. Here are a few ways to troubleshoot common inventory issues and prevent these pitfalls in the future.
Disorganized Inventory
Are you running your business out of a spare room in your home or garage? If so, you might be dealing with an issue that plagues many small business owners: a lack of space. Trying to store all of your inventory in a small space will generally leave you with a disorganized mess, and you might have trouble taking stock of everything.
The solution? If you have a backyard, you can construct a free-standing steel building for storage purposes. It will take a little elbow grease, but having a space exclusively designed for your inventory will make your life easier! Before you roll up your sleeves, do some research on different structures to figure out which kind of steel frame will best suit your needs. And once you’ve packed up your inventory in your new storage space, make sure to tidy it up regularly to keep everything in place.
If backyard storage isn’t an option, then consider renting a self-storage unit to keep your excess inventory. StoreMore Self Storage has safe, clean, and secure storage units, and you’ll be able to access your inventory seven days a week.
Shipping Mistakes
Shipping the wrong item to a customer can feel mortifying, but thankfully, this situation is easily remedied. First, contact them and offer to send a return label so that they can send the item back for you to swap out. In some cases, they might prefer to be reimbursed for their original payment and cancel the order.
How can you ensure that you always send the right products in the future? Come up with a checklist that you can go over before shipping out each order, which should include double-checking every item ordered and the customer’s address.
Obsolete Inventory
At some point, every small business owner has ended up with obsolete inventory. When you have inventory in stock that is nearing the end of its life cycle, you might wonder what to do with it. According to CFO Selections, holding a sale or selling certain items at a discount are two easy ways to offload excess inventory. Once it becomes obsolete, your options are more limited, and you may have to take the financial hit and eat the cost.
Every small business owner should learn how to avoid accumulating excess inventory. Each month, take a close look at your sales trends to identify slow-moving inventory, come up with a strategy to increase sales of those items, and note how this will affect your future supply orders.
Errors in Data Entry
Bookkeeping can be tricky, yet many small business owners feel like they have to manage their books by themselves. However, even one typo can have serious consequences. If you’re dealing with a bookkeeping error, you’ll need to comb through your data to find the root of the issue. Next, contact any affected parties to negotiate a strategy for fixing the situation.
Want to reduce the risk of bookkeeping errors? The Balance recommends using accounting software designed for your industry to log and analyze your sales information. Furthermore, you should work with a qualified, trustworthy bookkeeper. You can find these professionals and many other experts through online freelance job boards. Keep track of your records and receipts, and review them regularly – you never know when you’ll catch a mistake!
When you’re running a small business, dealing with human errors and minor mistakes is all in a day’s work. But when it comes to managing your inventory, you want to minimize those risks whenever possible. By utilizing a storage space that suits your needs, coming up with a straightforward organizational system, and consistently reviewing your inventory data, you can boost your profits and simplify your to-do list.
