I’m very passionate about stock management for small businesses because I believe it is one of the most overlooked yet most important skills for small business owners, who sell products, to learn. Good stock management can increase your sales and ensure your retail offering is successful.
Why Good Stock Management is Critical for Small Business
1. Big spender
Your stock is your biggest expense within your small business and that is reason enough for you to focus on your stock management ongoing. This is what sets product retail businesses apart from service-based businesses.
It’s one of the reasons why product businesses can struggle when given more general business advice that’s focused on service-based businesses.
Stock takes up a chunk of your sales in your small business. When you sell something – you’re either going to have to pay out to create it or buy more stock.
So some of the money you get from sales goes towards the cost of future stock purchases – and this is the part to focus on – it’s one of those expenses that if you’re not managing it can easily get out of hand.
Be clear on your stock management because it’s the biggest expense in your small business.
2. In the driving seat
Managing your stock well will put you in control of your small business. How does it feel to have your stock management under control?
Well, it will feel like you’ve got your small business mapped out in front of you for maybe 12 or even 18 months. You’ll have a really good understanding of how much of your money is tied up in stock and how much you’ll need to be spending on stock in the foreseeable future.
You need to focus on your stock – it is literally make or break for product business owners.
It’s no secret that the majority of businesses that fail run into financial problems – usually caused by poor stock control. They basically run out of money, so managing your stock is taking care of a critical element of your small business – if you don’t have the biggest expense in your small business under control you will run in trouble!
If you want to know more about this, then episode 5 of my podcast is all about stock management and if you enjoyed reading my blog you may find this article I wrote for Forbes last year interesting ‘Can Small Businesses Adapt Their Supply Chain With Current Challenges?’.