Stock taking is essential in any business to forecast what stock you will need to purchase given how much you sell. Getting it right is essential for your business to maximise profit and minimise waste. Taking stock regularly allows you to to evaluate how much product is used on a regular basis, meaning you can restocking to happen before it runs out. This knowledge also allows the minimisation of waste by not overstocking products that may not be used. While every business’ stock taking system will be a little different, here are some tips to keep in mind to help you improve your own system.
Choose An Appropriate System
In terms of stock taking techniques, there are two types of systems. High tech systems are more expensive, but if used correctly can be accurate, informative, and save time. This type of stock taking can require computerised systems, scanner guns and barcodes, and reliable staff that use the technology consistently. High tech systems are typically the domain of large drinks suppliers rather than coffee shops and bars as they can be expensive to install, need adequate staff training to ensure all data is imputed correctly, and might not be used sufficiently often in smaller businesses. That said, the price of a handheld barcode scanner has dropped significantly in recent years – if your inventory management software supports barcode entry, it might be worth spending a little to save some time.
Low tech systems are cheaper, but more time consuming and less accurate. This type of stock taking procedure requires staff to manually record stock by assessing visually how much product is available. This can result in inaccurate estimations or missed stock. However, this system of taking inventory is generally more attainable for smaller companies who may not have the capital to invest in high tech equipment. With a low tech approach, it is important to retain purchase orders and sales data to use as insight into how much you buy and sell on a regular basis.
Keep Your Methods Consistent
The key to good stock taking is a consistent process. Whether you decide to carry out your stock take weekly, bi-weekly, or monthly, it is important to keep it the same. Likewise, the method of counting, recording data, and analysing data should be kept the same to avoid error. If you are taking stock with a spreadsheet or manually, it’s good idea is to lay the spreadsheet out the way your stockroom is laid out. This will eliminate the need to bring all the stock out of the storage area, and will lessen the risk of missing items. Additionally, it’s best to keep your counting method the same. A good way to visually measure how much stock is left in a bottle or container is to measure by ‘tenths’.
It is also important to train your staff on how to effectively run a stock take so that all measurements are comparable and accurate. Removing distractions such as music, phones, and giving staff different tasks will maximise the concentration of your employees and minimise the time spent stock taking. It is best to take stock when your business is closed, such as early in the morning or late at night so that customers are not dismissed and product isn’t missed. Some facilities split stock taking over two days, with dry and food products counted one day, and drinks and liquor the next. This avoids rushing and makes the tasks more manageable.
What’s Selling Well?
Stock taking will give you a general idea of what drinks are popular and what you may consider swapping out of the menu. While you want variety and choices for your customers, you also don’t want to overwhelm them and have strange products that aren’t enticing. By taking stock regularly, it is easier to replenish popular items and find out which products aren’t selling. It’s also a good way to keep products fresh – roasted coffee beans or cocktail ingredients shouldn’t sit around too long, after all! While this information isn’t crucial for running a coffee shop or bar, it can make it more profitable and therefore worthwhile.
Taking Stock Regularly to Forecast Patronage
Regular stock taking can offer a great level of insight into what may happen to your business in the future. By comparing different stock takes, you can see the progress you are making in terms of profit and loss, and what products are best for your business to keep investing in. Keeping up regularly with your inventory will allow you to not only analyse the current financial situation of your business, but will also allow for forecasting of future profits. From this data you’ll be able to set achievable goals and maximise the value of your business.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.