Running a small business is as much about keeping track of the details as it is about being able to see the big picture. Of course, there’s so much to keep track of that it can be hard for even the savviest business owner to know which metrics take priority.
But understanding which metrics can offer the best information overall improves the ability for business owners to truly see the big picture. This isn’t the only important data a business needs to see, of course. Generally speaking, there are six forms of data that can help a company plan, forecast and remain flexible in today’s economy.
Inventory — Data on inventory means more than just know what’s sitting in the warehouse. Inventory consistency can highlight potential problems in terms of a higher chance of having to issue backorders and avoiding overstock which takes up valuable space.
Customer Satisfaction — This is data every company thinks they’re tracking but which few actually do. Customer satisfaction ratings can be gleaned not only from straight-forward surveys and communication but also from retention and sales history.
Seasonal Shifts — Identifying seasonal changes makes it easier to identify peaks and lulls that can lead to overstock or the need for backordering.
Cycle Time — Simply put, cycle time is the amount of time it takes an order to go from being placed to ready to ship. Ideally, this window should be as short as possible.
Inventory Turnover Rate — The amount of time inventory sits on a shelf either in the store or in a warehouse is time it’s costing you money. Understanding the turnover rate for a products helps with forecasting and ordering.
Warehouse Efficiency — Many of these metrics relate back to overall warehouse efficiency. Employee productivity, supply chain rimes and order quality are other measures that can affect this metric.
Inventory management for small business is about more than just how much you have. It’s about how best to manage your products, your space and your talented employees. It’s also a vital part of the data that can give business owners a larger view of their company’s overall health and, ultimately, its future.