Inventory System for Small Business: The Ultimate Guide to Implementing an Effective Inventory Management System
Small business owners spend a lot of time and money running their small businesses. Most of them are also involved in the day-to-day operations as well, and one of that activities is managing inventory.
In a business keeping everything organized can be challenging, especially if you run a small business with limited storage and inventory space. Thus, an effective inventory management system is essential for any small business owner for maximum productive output and growth of the business.
An efficient inventory management process will help you keep track of your products at all times, making it easy to manage your stock levels and identify when something has sold and at what price. In this article, we’ll explain everything you need to know about implementing an effective inventory management system in your small business. Read on to know more.
What is an In-Store Inventory System?
An inventory system is a program used to track and manage a company’s stock of products. While it may sound simple, inventory management is a critical component of any retail business.
If you have ever walked into a clothing store, grocery store, or even your local coffee shop, you will notice how the non-availability of any particular products or expiry products on the shelves can drastically impact consumers’ outlook on the business.
The goal of an inventory system is to give the owner and/or manager of the store a complete picture of the current inventory. A good inventory system will show any short-term or long-term shortfalls and can also provide useful information such as average inventory levels, volume sold, and the current percentage of inventory that is on hand.
Benefits of an In-Store Inventory System for Small Businesses
- When your inventory system is effective, every item in your store sits at the correct location and in the correct quantities
- When customers walk through your door, they can easily find what they are looking for.
- They don’t have to rummage through your store trying to locate an item.
- Inventory levels are easily identifiable. A poorly managed inventory system can be a black hole for your business. You can have a lot of items in your store but if they are scattered and put in the wrong place will struggle to reach customers.
- Risk of theft can be reduced – If you know what inventory levels are sitting in your store, you will be better able to guard against theft. If you keep one item at a lower level than the rest of the stock, it will be more noticeable if someone walks away with an entire case of items.
- Sales can be tracked – A well-designed inventory system will give you an accurate picture of your sales. With this information, you can track trends and make adjustments to better meet your customers’ needs.
- Inventory accuracy is assured – If you are not sure what inventory levels are in your store or are unsure if the item has been sold, you will be able to find the answer with your inventory system.
Increases in customer satisfaction – An effective inventory system can make your customers feel more valued and confident in their purchases. They know that if something is on sale, they will be able to find it easily.
How to Set up an In-Store Inventory System for Small Businesses?
- Identify the types of inventory you will track – Start by identifying all the types of inventory that will be tracked. A good inventory system will give an accurate inventory of all of these items at all times.
- Create a system that is easy to use – Your inventory system should be easy to use for both store employees and customers. Create a system that is designed with the ability to view inventory levels and items at a glance.
- Train employees on how to use the system – In order to get the most out of your inventory system, every employee needs to know how to use it. Training employees on how to use the system will help them to understand the items they are looking at, as well as when and where to find specific information.
- Ensure that all equipment is compatible – Your inventory system will have to interact with every piece of equipment throughout your store. Make sure that all of these items are compatible with each other and with your inventory system.
- Monitor your system to make sure it is working properly – You will want to periodically check the accuracy of your inventory system.
Install an alarm system to alert you if the inventory levels in your store fall below a certain point. – Track and report inventory levels so that you are able to show your suppliers, bankers, and other business partners how much inventory you have on hand.
How Often Should You Update your Inventory in an In-Store Inventory System?
The amount of time between updates will depend on the amount of inventory that is in the system. A small business that has less than $100,000 in inventory will likely need to update their inventory less often than a business that has more than $100,000 in inventory. For instance, a business with $100,000 in inventory that updates their inventory once a month would need to update the inventory less than once a week. A business with more than $100,000 in inventory in the same situation would need to update their inventory about once every two weeks.
Conclusion
Inventory is one of the key components of any retail store. It’s critical to maintain accurate records on what is being sold, to whom, and when. If you don’t have an inventory system in place, you’ll be missing out on critical information. You’ll also be more vulnerable to theft. An inventory system can help identify shortfalls and overstocking issues. It can also help identify trends in sales and track seasonal trends.
Note: There are a lot of SAAS products available in the market with end-to-end business solutions, these SAAS products integrate different business processes like billing, inventory, business intelligence, etc. in a single interface. They have versions based on business volume and units covering micro to large-scale businesses. A few good and reputed software are Netsuite, Epos Now, Traqq, Lightspeed Retail, Marg, Eazy ERP.
