Managing stock. This isn't the first time I've written about this - I'm very passionate about stock management because I believe it is one of the most overlooked yet most important skills for product business owners to learn.
1. Big spender
Your stock is your biggest expense and that is reason enough for you to focus on your stock management ongoing. This is what sets product businesses apart from service based businesses. It's one of the reasons why product businesses can struggle when given more general business advice that's focused on service based businesses.
Stock takes up a chunk of your sales. When you sell something - you're either going to have to payout to create it or buy more stock.
So some of money you get from sales goes towards the cost of future stock purchases - and this is the part to focus on - it's one of those expenses that if you're not managing it can easily get out of hand.
Be clear on your stock management because it's the biggest expense in your business.
2. In the driving seat
Managing your stock well will put you in control of your business. How does it feel to have your stock management under control? Well, it will feel like you've got your business mapped out in front of you for maybe 12 or even 18 months. You'll have a really good understanding of how much of your money is tied up in stock and how much you'll need to be spending on stock in the foreseeable future.
I cover this a lot in The Resilient Retail Club. I have a course called 'Grow Your Profits', which works through the kind of spreadsheets and tools you can use to set up this type of stock management.
You need to focus on your stock - it is literally make or break for product business owners. It's no secret that the majority of businesses that fail run into financial problems - usually caused by poor stock control. They basically run out of money, so managing your stock is taking care of a critical element of your business - if you don't have the biggest expense in your business under control you will run in trouble!
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