How Small Business Owners Can Effectively Plan Their Holiday InventoryTyler Sousa
It may be difficult to believe, but the summer season is quickly coming to an end. For consumers in much of the U.S., this usually only means a smooth transition into the chilly months ahead. But, for a small business owner, there’s a lot more to worry about than shopping for your fall wardrobe. Many tasks lie ahead before we get to year’s end, and perhaps the most demanding of all is planning out your holiday inventory. Since the season’s success is riding on company sales, you have to thoroughly calculate how much inventory you will need to meet the demand for projected orders. But, you also must avoid going overboard with your purchases as too much inventory can be just as costly a mistake as a shortage.
Here are some planning tips you can follow to ensure that your inventory is prepared for the holiday season.
Map out a realistic budget
First and foremost, you will need to plan out how you intend to use your seasonal funds and set aside an allowance exclusively for inventory. Since funds are required to purchase merchandise, straightening out your budget should be at the top of your list.
In addition to standard business expenses, you will also have to calculate any extra costs that come along with the holiday season – such as an increase in packing and shipping due to the boom of orders. This way, you can accurately determine the max budget you can spend on inventory alone.
Review last year’s data
Before you even think about placing an inventory order, you have to plan out the quantities you need.
Sure, you could order your inventory based on how well your products have been performing throughout the year, but you’re taking the risk of placing inventory orders based on an inaccurate number.
The best way to forecast sales for the months ahead is to analyze your data from the year prior. Calculate how much product was needed to fulfill orders; try to recall if any stockouts resulted in a loss of sales, or if there was any overstock that could’ve been prevented.
Don’t wait to order
Once you’ve decided on how much inventory you will need to get through the season, you’ll want to take care of your inventory orders ASAP. Even though the holidays may seem a lifetime away, it’s better to take care of your purchasing sooner rather than later.
This is recommended for two significant reasons – for one, consumers are starting their holiday shopping earlier than ever before – and two, you want to beat your competitors to the items in high demand.
Completing your purchasing early will help you stay stocked, so you don’t have to worry about placing any rush orders amid the pandemonium.
Hire additional help if needed
If you’re in an industry that experiences a surge in sales around the holidays, then you’ll most likely need a few extra sets of hands to help with the increase in orders and carefully keep track of inventory.
Bringing on a few new team members will help relieve some of the stress that full-time employees tend to endure around the busy season, while also helping you deliver a seamless shopping experience to your customers, as more employees could mean shorter wait times at your business.
Consider inventory financing
If you begin to feel panicked after reviewing all of your holiday season costs, that may be a sign that you need some monetary help for your business.
Fortunately, there are many inventory financing options available that can help ease that financial burden. Inventory funding through online funders make it easy for you to purchase the supply you need when you need it, so you aren’t left to struggle through the holidays.
Preparing for the bustling season may be the last concern on your mind right now, but it’s in your best interest to tackle your holiday inventory head on – and quick, if you want to end the year with a bang.