Top 5 inventory management tips to supercharge your business

Top 5 inventory management tips to supercharge your business

As a business owner in the food industry, you have a lot on your plate. You have to deal with managing staff, financial planning, ensuring that your restaurant meets industry standards according to the Health Act of 1977; not to mention coming up with a killer menu to impress customers and meet their expectations. But there is one aspect of your business that can put your head in a serious spin: inventory management. You have to track inventory and be constantly switched on with what stock you have on hand, what’s running low and how to keep all of it fresh so that you’re not wasting food and money in all the wrong places. Food products tend to expire quickly, adding to the difficulty of stock control.

 

 

As the disgruntled customer suggests above, when a restaurant runs out of food it is terribly disappointing and negatively impacts your brand. Can you blame this person for not wanting to go back? This is why it’s important to maintain a steady supply of inventory – letting down your customers will only result in a damaged reputation. Because of the havoc this can cause we’ve put together a list of the top 5 things that you can do to make the process of managing stock a lot easier.

Check the stock when it’s delivered

Inspect the products, checking that the correct quantity has been delivered and that the items are not damaged. As far as food items are concerned, be sure to check that the best before dates are not coming up anytime soon. Imagine wasting your hard-earned money on produce that won’t yield any profit. A careful look at any new stock received will save your business money in the long run. You will be able to pick up any shortcomings in the items received and improve the overall efficiency in the day to day running of your business.

Track and analyse your inventory

Are you overspending when it comes to stock? With proper care, you will be able to evaluate how much you need to spend so that you have enough to meet your needs and avoid excess produce that will only go to waste. It’s a good idea to keep track of what menu items are most popular, this will give you a good indication of what you need to purchase more of and what you can cut down on. Estimate how much inventory you will need based on prior sales or seasonal demand and change these based on shifting customer preferences and new sales trends.

Tracking your inventory will give you a good indication of your most popular dishes and which products generate the most revenue. This will give you a clearer picture of the amount of inventory you need to order. If crunching the numbers isn’t your strong point the Wilson EOQ Model created by Ford W. Harrison provides a great formula for determining the optimal order size for a given unit of inventory. By looking at your inventory data you can get valuable insights into how your business works, what sells and how to make improvements as you go along. By analysing your inventory data, you might also discover that another supplier provides better value for money.

Store stock in a secure place

Produce like meat, vegetables and fruit should be purchased on a regular basis so that your meals are always fresh. Non-perishable items like tinned food can be purchased in bulk since this has a longer shelf life. Make sure you store all items in the right place under the right temperature so that they won’t go off before the expiry date. This will not only save you money, but it’s also kinder to the environment as discarded food ends up in landfills where it rots and releases harmful greenhouse gases. According to CSIR principal scientist for pollution and wasteDr Linda Godfrey, a third of all the food produced in South Africa is wasted. At an alarming cost of roughly R60-billion a year that’s equal to 2.1% of our Gross Domestic Product (GDP).

Use software to manage your stock

In the digital age, we all welcome a little help from technology to lighten the load and improve productivity. There are many applications designed to help you effectively manage stock. When you have a hectic workload it makes little sense not to take advantage of some kind of software to help you better manage the inventory you have. Think about how much time you will save by using this type of technology, instead of relying on pen and paper or tedious excel spreadsheets. Some great online tools include the Goods Order Inventory System (GOIS Pro) – a web and mobile application designed specifically to address the inventory management needs of SMEs. This app can be used both online and offline, making it easier to help your business automate inventory processes. If you’re looking for a free version of software, then opt for Stockpile. This online inventory system for small businesses gives you valuable information about inventory turnover with great reporting functionality. With useful features like adding inventory, taking returns, recording sales and checks for damaged goods, this nifty application is sure to get you on the right track to controlling your stock. Because restaurant owners do a lot of running around, cloud-based or mobile friendly systems are always a plus and make it easy to access information from anywhere.

Find trustworthy people to manage stock

Even if you’re using software, you still need people that will help control your inventory. Generally, it’s best to hire two staff members to perform this function. Two sets of eyes make it less likely that anything will be missed during the inventory count. Alternatively, if you can’t afford to hire staff to count stock, ask existing staff to do it as part of their duties, or manage this area yourself if you have the time. Whether you hire staff or conduct the stock check yourself, make sure that this is done on a regular basis.

When it comes to inventory management it’s vital that you have a clear plan in place which will help you work out a budget that is in line with what you require. Inventory management may seem like a very stressful and lengthy process, but it doesn’t have to be that way. Sometimes as a business owner it’s okay to step back and admit that you don’t have all the answers. Challenges are bound to arise so there is wisdom in using your staff or making use of online resources to better manage your business. If you need extra help in this area, it may be worthwhile to get a mentor who understands your business needs. For advice on finding the right mentor check out our blog on the NSBC.

If you know that investing in staff or purchasing inventory software will help your business, don’t let a lack of capital stop you. This is where businesses like Lulalend come in. If you need quick, easy access to business funding you can apply online with us and see the money in your account within 24 hours. Don’t put off investing in the things you need to help you improve your inventory management and grow your business because you don’t have the cash flow on hand. Speak to us about small business funding between R20 000 – R500 000.