For a new business owner or a firm that is dealing with an expanding workload, there are plenty of things to keep you up all night worrying about. One of them is about all of the extra stock that will inevitably need to be purchased in the coming weeks in order to deal with the demand. Consideration also needs to be given to where all of this new stock is going to be stored as it is likely you won’t have the space available to deal with stock that you haven’t previously accounted for.
However, not every new business owner is completely au fait with the ins and outs of dealing with stock, so we will go through some of the frequently asked questions to help those in need.
What are the different types of stock?
These can be split into four separate categories:
· Raw materials and components, which are ready to use in the production process.
· Work in progress – this refers to unfinished goods in production.
· Finished goods that are ready for sale.
· Consumables – things such as fuel and stationery.
The type of stock that you carry can sometimes influence how much you should have around. Indeed, you may not need to have all of the stock on site, as you could have it placed in storage facilities close by that can be tapped into any time more stock is required.
How much stock should I store?
Deciding upon this depends very much on the size and nature of your enterprise and the type of stock that is involved. You could keep little or no stock around the place, but this could lead to you running out before the supply is replenished and it also leaves you dependent on the efficiency of your suppliers, meaning you are not in control.
It’s advisable to keep as much stock as possible. The main advantages are:
· The stock levels will be easy to manage and maintain.
· There will be low management costs involved.
· It is highly unlikely that you will ever run out, meaning customers will always have stock to choose from.
· Buying in bulk can also be cheaper in the long run if you do a deal with your suppliers.
This could suit your business if sales are difficult to predict, such as if they are very seasonal, if you can store plenty of stock relatively cheaply, if the components or materials that you purchase are unlikely to be subject to rapid developments or if they take quite a while to re-order.
What are my options for stock storage?
There are plenty of options available to small business owners and it depends on the type of stock that you deal with. As stated earlier in the piece, there are four different types of stock and if you are dealing in any of these, a temporary or permanent storage facility could be the best option.
Renting temporary buildings allows plenty of flexibility for owners as the facilities can be built to perfectly suit your needs. Having adequate storage space is essential, as is keeping it dry and clean – especially if you’ve taken on a lot more business that your current home doesn’t have room for. This is where rented storage facilities can help in a big way.