This is the first of a 5 part series on getting and keeping your business organized.
Business owners should be like drones. Not the buzzing worker bee kind, but the gyrocopter kind. The new and ever popular flying drones operate overhead and can record life at a higher elevation. Being knee-deep in your business can sometimes overshadow that perspective.
That 30,000 foot view (or in the case of drones, 2,000 foot) creates an overall picture where work flow, employee motion, missed opportunities and customer perspectives are apparent. The best way to do this is to run a business that runs itself. If you’re a control freak, you need to learn this. You will not observe a lot of these things while putting yourself in the middle of it all.
If you are currently immersed in day to day goings-on with your business and constantly have to make course corrections, then you either have the wrong people in place or you haven’t provided enough training. Start by doing a self-assessment of your business or hire a consultant to be the objective set of eyes and tell you what he or she sees.
Part One – Assets
In any company, the loss of assets becomes a difficult task when trying to recover through an insurance claim if there is no organization to the assets. Even worse, the loss is compounded when there is no insurance to collect from. Having 100% records of inventory, equipment, vehicles and facilities makes recovery smoother and faster. Loss can be a result of fire, theft, weather or building failure. AND, it results in a greater chance of profitable success.
Inventory & Asset tracking – Depending on the size, the number of locations or the volume of products, this task can be time consuming and difficult to track. Whether you have inventory and other assets in a computerized database or keep track of it on paper, you need to make this a part of your business plan to protect yourself and your company. I haven’t run into many companies that still do this on paper, but if they are, they are seriously limiting themselves and are very vulnerable to their competitors who do.
The ideal way of tracking inventory is through the use of bar codes or RFID magnetic senders and receivers. Bar codes require scanning with a laser reader device and RFID only requires proximity (depending on the kind) to the product. Each are linked via computer and software to an inventory system and accounting system. This makes evaluating your inventory as well as any assets much easier to track on a continuing basis. There are simple systems for smaller companies and encompassing systems for larger companies. Each deliver live information every minute of the day. They can be verified with cycle counts or full inventories on a periodic basis. These speed up delivery of products by allowing easy finding of products, scanning and billing. Multiple locations can be linked together and products for one customer can be sourced from different locations and shipped direct to the customer.
Re-ordering can be automatically triggered by minimum levels and lead times. Value adding to products may be easily amended to the cost and selling price. These systems deliver a complete inventory to accounting and all the way to a customer (& warranty) tracking function. These are also known as ERP (Enterprise Resource Programs). These reduce the cost of accounting, callbacks, customer follow-ups and numerous other parts of your business. Need to do an inventory or cycle count? Print out a live list of what you have in inventory from the ERP.
These systems may be out of reach for smaller businesses. But this doesn’t mean you shouldn’t track your assets and inventory. Using Excel spreadsheets and Access databases or other similar systems can also accomplish the same thing at a much more reasonable cost. The expense comes in the time involved to input and maintain and maintain data.
The ideal way to perform the initial inventory is to perform it doing business shut-down. Give your employees an incentive to work the odd hours, set up teams and give them each a specific location to count. If you have more to count than you have available people, ask relatives and friends to help. There are companies that provide inventory services for hire as well. Then, if all else fails, do it while you are open for business tracking incoming orders and outgoing sales carefully.
The perfect time to do inventories is at fiscal year-end so financial adjustments can be made that represent a true representation of past year’s business.
Next time, we’ll look at People. Whether they are your partners, employees, customers or competitors; we’ll take a look at relationships, trust, reliability and feedback and how you work with each one?Social tagging: succession