Cash is tight in any retail business at any time of the year.
The most significant and immediately accessible hidden cash can be found in dead stock: stock which is not turning, stock you have paid for, which is costing retail space and labour.
Test this theory. Use your EPoS software to list items you have in the store which have not sold in three or six months. If you don’t know how to produce the report, ask your software company. Your system supplier should be able to help you easily report on stock which is under performing.
You will need to ensure that your computer system has all stock currently in your business detailed to the software – including stock at home and in the back room. No hiding anything – not if you really want to free cash.
Don’t think for too long – quit the dead stock quickly . Free up cash – probably less than you paid but learn from that.
Use your computer to guide you on new stock. Look at your top selling items, departments and categories over which you have 100% control. Use the freed cash to expand in those growth areas.
Put in place professional inventory management standards:
- Arrive all new stock into your software.
- Scan all sales.
- Scan all returns and write offs.
- Produce a reorder report from your software for future orders – do not let reps order for you.
If you have dead stock, it’s on you.
If cash is short in your business run the report, understand your dead stock number, act.