TRADE FEATURE

YOU NEED SUFFICIENT STOCK TO RUN A SUCCESSFUL BUSINESS

Stock control is about managing your stock effectively, which is a key part of any successful hospitality business. Stock control involves careful planning to ensure that the business has the right quantity available at the right time because lack of stock can lead to a loss of sales and can ultimately damage your business reputation. Whilst most hospitality business owners recognise the benefits of stock control, many find it difficult to implement because it takes time to set up a good system and to provide the necessary staff training. According to Sean Scott, managing director at Retail Systems, a company that provide a wide range of customisable Point Of Sale solutions for small and large retailers, stock control is the heart of any retail business and should work hand in hand with sales and profit management.

Scott says the main advantages of proper stock management is to minimize stock loss due to theft or breakage and it also allows good buying decisions to be made based on cost prices, potential profit and current stock on hand. “Without proper stock control buying, sales, stock and profit cannot be managed.” “The management of sales and profit can be done independently of stock management; however this is poor business management. Stock management can be done manually or with the assistance of a Point of Sales Program. The advantage of a Point of Sale Program is that it saves the business owner’s time and automates the capture of sales and incoming stock purchases to reflect a current stock on hand.”

Stock Control software specialist Ian Said adds that stock control will also point out items that are moving slowly and possibly overstocked, causing a strain on cash flow. Said says implementing an effective stock control program will quickly point out problem areas that the company can rectify. The company will be able to see which items are performing well, and which stocks are being used inefficiently or stolen. He says it is very important that the person controlling the stock systems is not the same person controlling the stock because the same person can steal and finds ways to work around the system to cover their theft. He also advises that the business does not hold too much stock for too long because this will cost the business.

THE COSTS OF HOLDING STOCK INCLUDE:

• Storage costs – the rent, heating, lighting and security costs of a warehouse • Bank interest - if the stock is financed by an overdraft or a loan • Risk of damage to stock by fire, flood, theft etc; most businesses would insure against this, so there is the cost of insurance • Stock may become obsolete if a buyer favours new or better products • Stock may perish or deteriorate – especially with food products