When it comes to small business stock control, there are some basic principles that will help get your inventory under control. The stock control system you use will likely depend on the size of your business and on the life cycle stage. Smaller start-ups may be able to manage with manual stock management in the short term. However, businesses that are growing will recognise the need to automation and integration in their small business stock control and this is where an all in one business management software solution can help.
Regardless of the system you have in place, there are four main types of stock:
- Raw materials
- Work in progress
- Consumables
- Finished goods
With this in mind, exactly what is small business stock control? In very simple terms, stock control is about understanding what stock you need to buy, when to buy it and how much to purchase so that you don’t have a shortage of stock or too much stock.
In addition, there are other variables to take into consideration such as the value of stock items and whether the stock is perishable or seasonal as this will influence how you manage the stock.
When you are developing or researching small business stock control systems, you will also need to take into account the cost of holding stock, some examples include:
- Insurance
- Storage
- Warehousing
- Freight
- Financing (the cost of interest on money loaned to purchase stock)
To calculate how much stock you need to optimally run your business, you will need to calculate your stock turnover rate and perform an annual stock take.
Get further information on small business stock control and Foresiight’s market leading software.
