The Recipe For a Good Business

I was preparing a vegetarian chili the other day and I realized that a well-run business is a lot like a good chili — or as business’ constant presence in my life demonstrates, maybe it’s more like garlic that sticks with you for a long time after you eat it. Either way, a business that is firing on all cylinders is not some one-dimensional entity that comes as a result of good sales or effective leadership or efficient inventory management. It is a combination of all these things, and when you peel back one layer, you get to look at the next.

One of the most overlooked areas of business is inventory management. Good inventory management is the key to running a business because if your customer’s demand exceeds your supply, you fail to maximize your profits. On the other hand, you don’t want to overstock your popular items because they will end up taking up shelf space and costing you money to store. In an industry like computer technology, overstocked inventory has a very short life span before it is deemed obsolete.

If you want to run an efficient inventory management system, first make sure that your attitude toward inventory is right. Your goal should be to get inventory out the door as fast as possible. Understand that inventory sitting on your shelves is cutting into your bottom line every day that it sits there. It is in your best interest to get it out the door so that should be your primary concern.

Next, examine what sort of system you have in place. Is it time that you switch over to a software solution for your inventory management needs? A good way to tell if it’s time to take the leap into the digitized world of inventory management software is to examine how much of your day is spent counting the items you hold in stock. If you’re going to the warehouse or stock room every couple of days to count items on the shelf and if this takes more than a few minutes each day, you should consider getting a software package to handle the job for you. Many of the software packages will integrate well with shopping cart software like Big Commerce, and this will make your life infinitely easier. Instead of receiving an order via your digital storefront and having to log into the inventory management software to note the order, the two software packages will communicate directly with one another.

You should also plan on holding regular meetings with managers to discuss inventory every couple of weeks. Take time to listen to your managers and get their takes on what items are cash cows and which items are cash hogs. Adjust your orders from the wholesaler or manufacturer accordingly.

The perfect inventory management system doesn’t rely too heavily on software or man-power, but instead balances the two. That is the perfect recipe for an efficient business.

Featured chili image courtesy of bagaball