Four: Managing Your Assets

Many small businesses have considerable amounts of money tied up in inventory (stock). Having the right amount of inventory on hand is a crucial part of managing your business.

Too much inventory on hand means you will have excessive amounts of capital tied up in stock, therefore reducing the amount of working capital you have available for day-to-day operations. Too little inventory means either not having enough items to sell to customers or not having the materials to provide your service or manufacture your product. This represents a lost opportunity to serve your customers and a potential loss in profits.

Before you can effectively manage your inventory, you must have an effective method of tracking and recording how much stock you have on hand. For more information on stocktaking, refer to ED&T's Recordkeeping for Small Business.

Minimizing Service Business Inventory
Purchasing and Controlling Retail Inventory
Controlling Manufacturing Inventory