When you first thought about starting your small business, you probably didn’t envision yourself spending hours managing your inventory. From raw materials to finished goods, you need to know what you’ve got, when you need more, and what it costs.
As soon as your business grows beyond simply selling to a handful of people you know, you find yourself spending as much (if not more) time dealing with inventory management as you do making your products. I can’t read your mind, but I’m willing to bet that’s not how you’d like to be spending your time.
I have good news for you - you don’t have to! We know all things about inventory management and are going to share our 4 favorite inventory hacks so you can reclaim your time.
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What is inventory management & how does it save time?
Don’t worry if you’re not exactly sure what inventory management is - you’re likely doing it on some level already, you just may not be thinking of it in this context.
Inventory management refers to the tasks you do to manage your business’s inventory, such as ordering raw materials (and/or products), using materials, storing materials and products, and selling inventory. It manages the entire process from ordered raw material through to sold finished product.
Developing good inventory management processes is important because without it you may:
- Jump from task to task, not knowing what you should focus on
- Order materials too late to keep a good supply of your product
- Waste your time, which eats into your profit margin
- Order too many raw materials, leaving your business with little working capital
- Redo inventory management tasks often because you aren’t tracking them properly
When you’re in the early stages of your business (or even when you’re more experienced), it can be tempting to stick with old processes rather than trying to find more efficient solutions. But when you take the leap to change the way you do your inventory management, you save time, money, and set your business up to scale in the future.
4 Inventory Management Hacks You Need to Know
1. Optimize Your Material Purchasing
Do you buy your raw materials as-and-when? This is fairly common for makers because you can’t always predict which products are going to sell quickly, and many makers need to store these materials somewhere in their homes.
While these are understandable reasons to buy raw materials regularly in small amounts, doing so is usually a big time-and-money leak. If you have (or can make) the space, consider purchasing what you need in bulk instead to increase your profit margins.
If the idea of buying in bulk makes you nervous, ask yourself if you know your stock levels and plan your batches ahead of time. If not, using inventory management software can help you feel confident in your purchasing decisions.
2. Stop Using Spreadsheets
I know - if you’re Type A, you love your spreadsheets, but they are a huge time suck (and you know it!). It doesn’t matter how pretty the spreadsheet is. It’s going to overcomplicate your business, and spreadsheets are generally prone to errors. Plus, as we’ll cover more in the point below, spreadsheets mean lots of of data entry.
Since you’re here reading this, we can safely assume you want your business to be a success that grows over time. If you want to set your business up for long-term success, you need to upgrade your tools. Remember, no top brands use spreadsheets to track inventory, so you shouldn’t either.
Inventory software (like Craftybase) allows you to unite all your spreadsheets in one place and will do all the heavy lifting for you - no more trying to figure out the right formula or setting up a new spreadsheet just to figure out what your next raw materials order should include.
Being able to log onto one piece of software and see at a glance what you’re working with (with the ability to analyze generated reports and more) will give you hours of your time back!
3. Automate Your Processes
Does anyone really like data entry? What about stock counts and year-end activities? You probably don’t hate doing it, but let’s face it: it’s boring and you nearly always end up having to go over data twice when you discover you’ve got something wrong.
While some of these mundane tasks are unavoidable, inventory management software like Craftybase can automate almost anything that can be done digitally. It can keep track of costs so you charge appropriately, generate COGS (costs of goods sold), track material compliance, automatically import orders, generate reports, and keep track of your bookkeeping.
Sure, you can do this all manually, but why would you? You’ll save h-o-u-r-s when you move to inventory management software so you can get on with the fun tasks you love or even have some extra time to relax!
4. Know Your Stock Levels
Do you know your stock levels? Knowing your stock levels means you always have enough materials on hand to make products, so you don’t have to make emergency trips to the store to buy materials at a much higher cost than you would have bought them for if you’d planned ahead (which cuts into your profit margins). It also means less stress, because you don’t have to scramble to fulfil your customers’ orders.
While you don’t need to have turnaround times on par with Amazon, you should be aware that consumers expect things quickly, so cutting down any extraneous time will help you increase customer satisfaction, get great reviews, and increase your Etsy seller ranking.
It’s easy to overlook the importance of inventory management and just assume that the time it takes to do is just par for the course, but if you’ve yet to try Craftybase Inventory + Bookkeeping software, you don’t know how much time (and money) there is to save. When you free up your time from administrative tasks, you’ll finally have time to grow your business. To find out more about how Craftybase can help you, click here.
