4 Key Steps for Tackling Inventory Management In Startups and Growing BusinessesJune 13th, 2014
Startups and expanding businesses can quickly suffer from information overload, but when planning for growth it is essential to have systems in place to ensure items are delivered on time while not tying up too much capital in unsold inventory.
Step 1 – Why we need a plan
Effective inventory management is critical for any business, particularly for a startup. Capital tied up in inventory isn’t available for sales, marketing or product development. An Inventory shortage means sales teams do not have the product available to sell and therefore cash flow suffers. The key is finding the balance.
Step 2 – Designing your business workflow
Mapping out your business’s fulfillment workflow will help optimize your process. Seeing how many people need to touch an order to get it from quote to cash is a very illuminating exercise and can help you spot places for optimization. You will often find that information is getting touched/entered by multiple people throughout your process. Many companies believe a software solution will “solve” all their problems, when some of those issues are process related. Software can help optimize your process but combined with a critical eye, your business can achieve far greater optimization. Clarity is key, and speaking with the right people will help you understand your business’ needs and be better prepared.
Step 3 – Choose the right software
QuickBooks is often the accounting office of choice for startups. It is the ideal solution for managing the accounting for small to medium sized businesses. However, optimizing the inventory management is often beyond the native capabilities of QuickBooks. Most startups look to add-on software, like AdvancePro Inventory, with more inventory focused capabilities to separate finances from operations. Discussing your business workflow with the inventory software vendor will help fast track your decision process and ensure you find the solution that will meet your needs.
Step 4 – Getting buy-in internally
Finding the right solution that will optimize your fulfillment and inventory processes is great but if your staff doesn’t adopt it you won’t see the benefits. Assigning a key internal person to champion the change is very important. That point person can stop any red flags before they become major issues and act as the intermediary with vendor support to get fast resolution.
Training and implementation is a very important part of adoption. A small investment in training can pay off with faster and more efficient implementation that will serve to speed up your return on investment.
Effective Inventory Management could be the determining factor in the success of startups and growing organizations. To discuss how AdvancePro might be able to help your business manage inventory, please contact us at 1-800-970-9071, Ext 1 or Email: Sales@advanceprotech.com