Taking stock – some tips for stock-taking
If your business involves the sale of products then you may be familiar with the concept of stock-taking (or doing an inventory count). Most of the time, businesses have computerised stock control systems which keep track of every product movement in and out. Well, in theory at least. No matter how accurate the stock control system, manual periodic stock counts are a must for any business. These stock checks verify what the system says should be in stock. Any differences can then be investigated and corrected.
The frequency and detail of a stock check depends on a number of factors. The value of items held in stock is probably the most important driver of the frequency of stock takes. Normally, high value items receive a lot of regular verification simply due to the financial loss which might be suffered by the business. Small items like pens and pencils, or nuts and screws, might be ignored in stock checks. A second factor is what I call ‘walkability’. For example, a high street newsagent might sell items like lottery scratch cards, pre-paid bus tickets or packs of cigarettes. All these are small, easy to conceal and readily saleable for cash. One high street retailer I know actually checks stock of lottery cards and bus tickets every night. It only takes a few minutes.
When deciding how often to do stock checks and what to check, try to keep these two factors in mind. You don’t need to count everything every time. It’s much smarter to be focused – it saves you time and, potentially, money.
Steering your business through a recession.
Managing your business is not an easy task at any time. In a recessionary environment, things get even trickier. Quite often, the best thing any business owner can do is get back to basics i.e. managing cash, managing costs and thinking about the future.
Tom Stewart from Booz & Company provides some sound advice. He suggests business’ owners and managers should concentrate on three things (1) liquidity, (2) operational costs and (3) planning for the future. Liquidity means having enough cash resources to pay for goods and services as required. Having enough liquid resources to survive the recession is essential. Focusing on operational costs is also very important. A lean, mean organisation has a better chance of survival. Finally, a view of the future helps business owners and managers identity how and where the business can grow as recession peters out.
It’s quite a difficult task to overcome the ‘paralysis’ of focusing on reducing costs now and not having a clear view of the future. According to Tom Stewart, overcoming this paralysis is a must, as if your business does not, another will and you will loose out. He suggests that business owners and managers while recognising the truth of the current economic climate, should also be optimistic and motivate staff to find ways to participate in decision making and planning for the future. One failure to avoid is cutting costs without a view of the future. This can result in an under-resourced business which will have difficulties as economic growth returns.
If you want to see the full video by Tom Stewart click here: http://bigthink.com/tomstewartmicrosoft/managing-and-thriving-in-a-down-market
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