If your small business sells a product growing your business is going to mean producing larger quantities of that product in a smaller amount of time. In the beginning you may have been your only producer and that was probably great. As demand increases managing the workload on your own can quickly becoming overwhelming. There are several pieces of your infrastructure that will need to increase to respond to this new challenge. You may need more space, more employees, more funding and/or more raw materials to keep pace with demand. We will cover each of those in depth in future posts but for now we are going to focus solely on managing increased levels of inventory. Whether you make or order the things that you sell your inventory management issues will change as your business grows. If you haven't already, you really should try out our free inventory software.
Let’s say you make thingamajigs. When you started out you made thingamajigs one at a time at your kitchen table. When you had a supply of fifteen or so thingamajigs you created a storefront and started selling them. It may have taken awhile but suddenly your thingamajigs caught on. Orders started pouring in. You sold out of the original thingamajigs and are now selling them faster than you can make new ones. New visitors to your store are being told that they won’t get their thingamajigs for several weeks. Suddenly they are looking for other businesses that make thingamajigs because they can’t or won’t wait that long to get theirs. If you had our free inventory software, then you'd know well in advance how you're tracking. You don’t want this to happen to you. This sudden backlog can be avoided if you have a plan to increase production.
Consider how long it takes you to produce your product. What materials do you need? How long does it take you to get the raw materials? Having a clear idea of the time required to produce each item will allow you to determine the timeframe needed to create exponentially higher quantities. At some point your ability to produce items will be maxed out and you will need more employees to meet demand. We will talk more about staff increases in a future post.
If you order your product from a supplier take note of how long it takes to receive your order. Check with your supplier to see what their production capacity is. Will they be able to meet increased orders from you or will you need to seek out other suppliers if your sales increase? Even if they can handle larger or more frequent orders It would be a good idea to have a backup supplier in mind just in case you need it. Being able to fill customer orders in a timely manner can make or break your business.
A key component to being able to provide the products your customers want is being able to manage the inventory that you have. When you started out you may have been able to track your products and supplies in a simple form. Mental notes and paper lists were probably sufficient. As your stock grows you will quickly outgrow those methods. Customer satisfaction is critical when growing your business. You need stock on hand to fill customer orders but you don’t want to overextend yourself or end up with stock that you can’t sell. Good inventory management software can help you find the correct balance. Improved tracking capabilities allow you to get a clearer picture of what your customers really want. This allows you to make better, more informed business decisions. You need to know what stock and/or raw materials you have on hand and where they are located. Inventory management software allows you to access that information quickly and easily.
One way to prepare for growth and be sure that you have inventory on hand is to use Stockpile. Our free inventory software allows you track inventory anytime from anywhere across multiple locations. Better yet, Stockpile is fast and easy to implement and will grow with your business. Once business starts booming things can really move quickly- with Stockpile you can be up and running in no time and you can get back to focusing on growing other areas of your business.