{"id":2687,"date":"2020-04-10T12:02:26","date_gmt":"2020-04-10T17:02:26","guid":{"rendered":"https:\/\/www.headwaycapital.com\/blog\/?p=2687"},"modified":"2021-11-19T00:31:00","modified_gmt":"2021-11-19T06:31:00","slug":"manage-inventory-tight-budget","status":"publish","type":"post","link":"https:\/\/www.headwaycapital.com\/blog\/manage-inventory-tight-budget\/","title":{"rendered":"How to Manage Your Inventory on a Tight Budget"},"content":{"rendered":"<p>Small business inventory management isn\u2019t always easy, even under perfect circumstances. When you include variables like economic unpredictability and low sales, shifting demands or supply shortages, things become much more complicated.<\/p>\n<p>Although you\u2019d like to keep all your shelves stocked, it\u2019s not always practical or possible. If your budget is very tight and you need inventory to sell, what should you prioritize?<\/p>\n<p>Whether you\u2019re adapting to a new business environment, have lower-than-usual income or a reduced budget, we\u2019ll help you strategically plan your resources and inventory. Here are five steps to manage your inventory on a small budget.<\/p>\n<p>&nbsp;<\/p>\n<h2><strong>1. Perform Regular Inventory Audits<\/strong><\/h2>\n<p>Before you invest resources and time to increase or change your stock, it\u2019s a good idea to start with a complete physical audit so you know exactly what you have on hand right now. Whether you count by hand, use a simple <a href=\"https:\/\/www.headwaycapital.com\/blog\/small-business-owners-guide-excel\/\" target=\"_blank\" rel=\"noopener noreferrer\">Excel spreadsheet<\/a> or an option like this <a href=\"https:\/\/www.zoho.com\/us\/inventory\/\" target=\"_blank\" rel=\"noopener noreferrer\">free inventory tracking software<\/a>, make sure to include every item in your warehouse, backroom and stores.<\/p>\n<p>If you don\u2019t already, consider an ongoing quarterly or monthly audit schedule to help monitor and maintain your inventory. While it might seem overly time-consuming, recurring inventory audits can help you:<\/p>\n<ul>\n<li>Quickly adapt to changes and meet customer demand<\/li>\n<li>Keep low inventory overhead costs<\/li>\n<li>Prevent waste\/loss or theft<\/li>\n<li>Consolidate orders and sales reports<\/li>\n<li>Order or produce more efficiently<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>2. Identify and Increase Best-Sellers<\/strong><\/h2>\n<p>It may be tempting to expand your inventory selection, but a wide product variety is more difficult to maintain, store and sell than a few high-volume options. In order to protect your finances and cash flow, consider limiting your offerings to the most popular product that you\u2019re confident will sell. You can always test new items as your budget opens up down the line.<\/p>\n<p>If you choose to decrease your product selection, make sure to keep a close eye on your supply so you don\u2019t run out. It may also help to have more than one vendor in case you need a quick replenishment or have additional or unexpected needs to fulfil down the line.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>3. Always Use the First In, First Out System<\/strong><\/h2>\n<p>When you have old stock you\u2019re unable to sell, it becomes a liability to your business. Not only did you spend resources to acquire or make the item, but now you have to use even more to get rid of it. The FIFO (first in, first out) inventory method is essential for cost and resource preservation \u2014 it\u2019s an effective tactic widely used by grocery stores, restaurants and other <a href=\"https:\/\/www.headwaycapital.com\/small-business-loans\/retail-trade\" target=\"_blank\" rel=\"noopener noreferrer\">retail businesses<\/a> by using or selling items on a first in, first out basis.<\/p>\n<p>Arrange items in-store so that the oldest stock is closest to the consumer, or consider limiting your online or in-store products to specific items that you need to sell sooner. If possible, only re-order inventory when your current supply is low.<\/p>\n<p>&nbsp;<\/p>\n<h2><strong>4. Scrutinize Your Data<\/strong><\/h2>\n<p>Use sales reports, <a href=\"https:\/\/www.headwaycapital.com\/blog\/small-business-cash-flow-statement-templates\/\" target=\"_blank\" rel=\"noopener noreferrer\">cash flow statements<\/a> and any other available data to identify patterns that can help you strategically plan ordering or production. It may also help to conduct periodic competitive research to learn more about businesses like yours, including what others offer, whether your prices are reasonable and if there are actionable areas of opportunity.<\/p>\n<p>Get to know more about your best customers, including their use for your product and previous ordering trends. Other tools like <a href=\"https:\/\/analytics.google.com\/analytics\/web\/\" target=\"_blank\" rel=\"noopener noreferrer\">Google Analytics<\/a> can help you monitor your website traffic and learn what keywords people used to find your page, which can give you more insight about your audience.<\/p>\n<p>&nbsp;<\/p>\n<h2><strong>5. Reduce Overhead Expenses With Free Small Business Tools<\/strong><\/h2>\n<p>A <a href=\"https:\/\/www.headwaycapital.com\/blog\/small-business-recover-negative-cash-flow\/\" target=\"_blank\" rel=\"noopener noreferrer\">cash flow<\/a> strain doesn\u2019t need to put your business at a standstill. Even if you\u2019ve managed to <a href=\"https:\/\/www.headwaycapital.com\/blog\/reduce-overhead-small-business\/\" target=\"_blank\" rel=\"noopener noreferrer\">lower your operating expenses<\/a>, you can still open up additional capital and manpower with free and creative business technology. Leverage these resources when you\u2019re running on a tight budget:<\/p>\n<ul>\n<li>These <a href=\"https:\/\/www.businessbacker.com\/blog\/12-free-marketing-tools\/\" target=\"_blank\" rel=\"noopener noreferrer\">free marketing tools<\/a> or our <a href=\"https:\/\/www.businessbacker.com\/blog\/social-media-content-calendar\/\" target=\"_blank\" rel=\"noopener noreferrer\">social media content calendar<\/a> can help you connect with your audience.<\/li>\n<li>Although a low budget may <em>temporarily<\/em> change your plans, you can still <a href=\"https:\/\/www.businessbacker.com\/blog\/cost-effective-ways-expand-reach\/\" target=\"_blank\" rel=\"noopener noreferrer\">reach new customers<\/a> or even <a href=\"https:\/\/www.headwaycapital.com\/blog\/how-manage-costs-while-expanding\/\" target=\"_blank\" rel=\"noopener noreferrer\">grow your business<\/a> with the right strategy.<\/li>\n<li>Monitor your bottom line with our small business <a href=\"https:\/\/www.headwaycapital.com\/blog\/business-budget-calculator\/\" target=\"_blank\" rel=\"noopener noreferrer\">budget calculator<\/a>, <a href=\"https:\/\/www.headwaycapital.com\/blog\/small-business-cash-flow-statement-templates\/\" target=\"_blank\" rel=\"noopener noreferrer\">cash flow templates<\/a> and <a href=\"https:\/\/www.headwaycapital.com\/blog\/bookkeeping-basics-small-business\/\" target=\"_blank\" rel=\"noopener noreferrer\">bookkeeping resources and tips<\/a>.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Small business inventory management isn\u2019t always easy, even under perfect circumstances. When you include variables like economic unpredictability and low &#8230;<\/p>\n","protected":false},"author":16,"featured_media":2688,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[611],"tags":[534,541,561,102,242],"class_list":["post-2687","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-optimizing-your-small-business","tag-cash-flow","tag-coronavirus","tag-covd-19","tag-inventory-management","tag-small-business-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Manage Your Inventory on a Tight Budget - Headway Capital Blog<\/title>\n<meta name=\"description\" content=\"Whether you have lower-than-usual income or a reduced budget, we\u2019ll help you strategically plan your resources and inventory.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.headwaycapital.com\/blog\/manage-inventory-tight-budget\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Manage Your Inventory on a Tight Budget - 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