Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
A small business can be a great source of income and pride for many Canadian entrepreneurs. Then again, many businesses require a constant stream of sellable inventory in order to make a respectable profit throughout the year and that can be somewhat difficult without proper management.
So, whether you’re an experienced small business owner or your operation is just getting off the ground, it’s important to learn the right strategies so you can buy, sell, and restock your inventory in the most efficient and cost-effective ways possible. If that’s your goal, Loans Canada has some advice that you may find useful.
Do you know how to measure your business’ liquidity?
Any product or supply can be highly profitable in its own way. That said, some items can be cumbersome, overly expensive, and stay in your inventory for months at a time if they aren’t as popular with customers as you were hoping.
To prevent these problems, businesses must consistently manage what goes in and out of their inventory, which is particularly important whenever items are large, perishable, or limited. Unfortunately, every unsold item in your inventory will gradually cost you more money, so whatever system you set up must be flawless.
Luckily, there are countless programs and techniques that you can use to keep track of every item in your inventory in real-time. This way, you can avoid ending up with unused stock that could cost your business more than you were expecting.
Need extra funds to finance your supplies? Check out these business financing options.
These inventory management methods are essential because they help you:
Another major benefit of having a proper inventory management system is that you can also avoid “dead” stock. Simply put, dead stock is any item that’s unsellable because it’s spoiled, outdated, or otherwise unpopular for some reason. Like all unused goods in your warehouse, any dead stock that you’re holding onto will slowly put your business further in debt, not to mention take up valuable space in your storage area.
Depending on what type of small business you’re running, your inventory can indeed have a significant negative or positive effect on your cash flow and the available working capital you have to deal with day to day expenses. After all, you’ll have to finance a bunch of goods, but won’t be able to earn that money back and turn a profit until you’ve actually sold them.
However, by incorporating a proper management software, as well as some of the other methods below, you’ll have an easier time tracking exactly how many items you have in your inventory and when they’ll need to be restocked, according to your predicted sales.
Whether you’re just starting a small business or you’ve had trouble managing your inventory in the past, don’t worry, because there are techniques that can make things easier on your budget, including but not limited to:
As mentioned, one of the most important aspects of managing your inventory is that it helps you predict when your shelves will need restocking, based on how well each item could sell in the near future. This is commonly called “forecasting”.
It’s also essential to prepare for any unexpected events that might come about while you’re trying to sell your stock, such as increases or decreases in product demand, sales promotions, or problems with the manufacturer. This way, you’ll be less likely to run out of anything or end up with an inventory that you can’t sell. At the very least, you can establish a backup plan for when those situations occur.
Also known as “low-turn” stock, the next step you should take is to go over your current inventory and weed out the items that may or may not sell within a reasonable timeframe. So, if you’re stuck with any unpopular products, it may be a good idea to put them on a discount or offer a promotional deal to get rid of them. While this may result in a loss, at least you’ll free up storage room for better stock.
Have you considered invoice factoring as a business financing option?
If you’re simply having a hard time calculating the overall cost of your inventory, it could be because you haven’t yet applied the “first in, first out” or “last in, first out” principles to your business strategy:
Although monitoring individual items is important, so is tracking whatever supplies you would buy in bulk. Essentially, batch tracking helps control the quality of your products because you can keep tabs on full shipments of perishable items and even trace faulty supplies back to their source.
Another way to track and manage the cost of your products is to use the basic ABC analysis technique, wherein you separate your inventory into three sections that are based on how valuable certain items are:
Simply put, consistently monitoring your inventory management software and storage reports is crucial, no matter how long it takes. This process can include:
A common practice for third-party vendors, dropshipping is when your business doesn’t actually have to deal with the woes of inventory management. Instead, customers can order their products through your business and the wholesaler or producer would take care of all the shipping and handling procedures for you.
The 3 main financial statements that all business owners should understand
All this said, there are many other techniques that can make managing your inventory less of a chore. Don’t forget to speak with a business expert to find out which ones would benefit your operation the most and ask them lots of questions, such as:
No matter what kind of products your business sells, there are sure to be a few points during the year when your storage facility gets busier than usual. Whether it’s summer or winter, Christmas, or Black Friday, there are times when you could easily lose sales because you’ve run out of stock. Unless you’re prepared, that is.
To avoid this hassle, it’s best to take these measures before the high season:
Remember, inventory management is all about efficiency and saving as much money as you can on the back end. As such, it’s best if you can balance your orders properly so you don’t end up with too little or too much product. That’s why many businesses and suppliers use these two formulas:
Learn how and when to open a business bank account.
Another essential step to take when managing your inventory is to maintain a solid and long-standing rapport with your suppliers. After all, you may experience problems with your orders or the products you buy, which could hinder business if you cannot resolve these issues in a timely and friendly manner.
If your relationship is strong enough, some suppliers will be more willing to negotiate on the price of goods or put you first in line to receive new stock. Always choose a supply company that has a trustworthy reputation and be ready to inform them when your inventory needs refilling so they can modify your orders accordingly.
No matter what size your business is, responsible inventory management is one of the essential steps to success. As a business owner, it should be your top priority to find an inventory management process or product that helps you stay on top of your inventory an achieve your goals.
Rating of 5/5 based on 1 vote.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Frank Mortgage is Canada’s one-stop shop for mortgages. Get up to $1,500 cash back on your mortgage.
Great unsecured credit card for customers currently in, or recently discharged from, a consumer proposal or bankruptcy
Earn an average 5%¹ cashback at thousands of partners and at least 0.5%² cashback guaranteed with Neo.
KOHO’s Credit Building Program helps you build a better credit history with easy to manage payments for just $10/month.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.