Tuesday, September 10, 2013

Tips on handling inventory management for small businesses

With this week topic focusing on inventory management, I thought it would prudent to scout articles that would throw light on inventory management for small businesses. Also, with the proliferation of small businesses across the country getting knowledge about inventory management for small business would be a useful guide. To folks contemplating venturing into small business enterprise understanding inventory management at the micro level of  the economy can't be overemphasized. I was able to run into online article " How to Run a Small Business: Inventory Management" and want to share with you all the useful it offered.

The article provided useful tips that would guide the process of inventory management for increased profitability and continuous business stability. The article also opined that effective inventory management is paramount to the the profitability of business and unsold inventories erodes business profit margins. The general tips offered by the article are:

1. Get an attitude = Small business owners need to realized that inventories are like wasting assets and must put up attitude that accelerates inventories sales as unsold inventories erodes profits and ultimately drives the business to bankruptcy. Unless, it is wine or scotch whiskey business, inventories do not improve with the passage of time.

2. Be Scrappy = This tip advises small business owners to build strong negotiation skills as they deal with suppliers so that they can enjoy extended payment terms, consignment arrangements and other privileges that will ensure effective business operations.

3. Think Green = Small business entrepreneurs need to ensure that payment terms to suppliers and creditor are far longer than account receivables duration to customers. The key takeaway is for small business owners to practice the age old axiom "cash is king" in their business operations.

4. Clean House = One key criteria to a successful inventory management is to regularly replace out-dated inventories with new ones through special promotions and sales discounts to customers. These promotions and sales discount make customers excited and loyal to the business. Key takeaway is that there is a regularly inflow and outflow of inventories.

5. Knowledge is Power = With the advent of e-commerce, entrepreneurs ability to adopt new technologies and business techniques in inventory management is critical to the survival of the business. The ability of entrepreneurs to strike a balance between the demands of customers and what suppliers are offering so as to ensure increased sales and profitability is crucial in the inventory management process of any business.

With the above being said, I think the article proffered meaningful points that small business owners can feed on in carrying out and maintaining an effective inventory management. Although it might not seems exhaustive to some folks but in my opinion the article lay the ground work to guide small business owners handling the cumbersome task of inventory management.



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