Doing Inventory Can Save Your Business
© THE PROFIT LINE Reprinted with Permission
If you are a retailer or manufacturer of physical products, performing inventory is critical to the success of your business. While you may have software systems in place to track items, nothing takes the place of a physical count at least once each year.
Just how important is inventory? We had a retail client who had not performed an inventory in 18 years. Yes, I said 18 years. When we finally convinced her to take stock, she was stunned to find that she had the equivalent of three years of product on hand. Three years of capital stuck in a back room!
She sold off much of this inventory at a drastic markdown to bring the stock to more appropriate levels. Donating some of the items that were out of date and just not saleable anymore resulted in a nice tax credit. Immediately, the client's cash flow and profit margins improved dramatically.
Now, with ongoing monitoring, she's able to minimize the amount of capital tied up in inventory and move items through her business more effectively. As a result, she easily draws more income from the business and takes more time off.
Could inventoried items be holding your business back? Unless you count them, you'll never know.
- Dealing with Difficult People, or Difficult people 'R Us
- Conquer Your Desk Before It Conquers You
- Clear the decks and block your time
- Clear out the clutter
- Financing Your Business with Government Help
- Following Up with Late--Paying Clients
- Get Your Books Organized
- Invoice on a Timely Basis