Effective Ways To Prevent Inventory Theft In Your Procurement Process

Posted on by Pavel

Inventory theft is sadly unavoidable for most businesses. Whether it’s theft by internal employees or retail customers, businesses should account for some loss in the form of theft. While some level of theft is unavoidable, business owners should take measures to make theft or loss as minimal as possible. Here’s what you should know about effective ways to prevent inventory theft. 

Why inventory theft is a problem

Inventory theft is a problem for many reasons. Theft has impacts from a loss of revenue to a decrease in inventory levels. If you don’t take measures to reduce theft, you could experience greater losses, which could have greater impacts, such as the inability to fulfill customer orders. The main reason inventory theft is a problem is that it impacts the bottom line. Additionally, with inventory being an asset, it reduces the assets of a company. It can also make inventory levels appear to be wrong as you will have less inventory than what you may have accounted for

Most Effective Ways To Prevent Inventory Theft

Conduct background checks on all employees who have access to inventory:

Unfortunately, internal theft is a big problem. With access to inventory and an understanding of how operations work, employees can steal inventory. Whether it be harmless, or completely intentional, you will want to do your best to reduce internal theft. One way to do so is to conduct background checks on all employees, especially those who have access to inventory. While some employees may not have been caught or reported, a background check can help you flag some potential hires who may have a history of stealing or unethical behavior. 

Install surveillance cameras at strategic locations throughout your warehouse or storage facility:

Surveillance cameras are powerful and you may not even need to monitor them 24/7 to make them effective. Just the threat of recorded footage can deter employees from stealing. If employees want to steal, though, they may find ways around the cameras. You may want some cameras hidden so that employees are not entirely aware of their placement. Footage from security cameras should be kept private so that employees are not aware of exactly what the camera covers. You also don’t want employees to be able to delete footage. 

Use an electronic security system that requires authorized personnel to enter sensitive areas:

Tracking who comes and goes from sensitive areas is another way to prevent theft. It holds employees accountable. When employees are held to certain standards, they are less likely to steal as the fear of getting caught is greater. 

Use barcodes or RFID tags to track all inventory items:

Inventory tracking systems can help reduce theft. They can also help you identify theft faster. While inventory tracking systems can be expensive, they are well worth the investment. 

Conduct regular inventory audits to ensure that your records are accurate:

When a theft occurs, inventory levels will reflect loss. Auditing inventory levels regularly can help you catch theft faster as well as determine how much loss you should be accounting for.

Train your employees on proper inventory procedures and how to spot suspicious activity:

Inventory counts should be taken regularly. This practice alone can deter individuals from stealing. If employees think you are not paying attention, they may sense an opportunity. Additionally, training employees on how to spot suspicious activity and encouraging them to come forward can help you identify theft sooner rather than later. 

Restrict employee access to sensitive areas based on job responsibilities:

Employees can have access to certain areas or inventory based on their job requirements or clearances. For security footage areas, high-dollar inventory areas, areas with cash, and so forth, you can restrict and or log who comes in and out. 

Encourage employees to report any suspicious activity immediately:

Employees need to feel safe and protected to report suspicious activity. Encouraging them is one thing, but reassuring them that the information will not be leaked is another. Employees are often scared to come forward for fear that retaliation will occur. Put a process in place for employees to anonymously or privately report incidents. They should not have to ask around to determine how to report theft. 

Have a zero-tolerance policy for inventory theft:

A zero-tolerance policy sets the precedent for employees that theft is not tolerated. Employees who value their jobs will likely be deterred from stealing if they see a coworker get terminated over stealing. 

Work with law enforcement to investigate and prosecute inventory theft cases:

As we mentioned earlier, theft is sometimes harmless and unintentional. Nevertheless, theft is theft. If you catch someone stealing, you should take action to report the incident. It’s likely that if someone steals once, they will steal again. Law enforcement can help you take action to reduce the potential risk of an individual stealing again while determining punishment for their wrongdoing to you. 

Closing thoughts

Inventory is the lifeblood of businesses. It is purchased and sold to turn a profit, and when theft occurs, the business suffers a loss. If you purchased inventory with inventory financing, you would have to cover additional loss. Maintaining accurate and adequate inventory levels is critical, as is maintaining healthy cash flows. 

How Kickfurther can help

Kickfurther can fund up to 100% of inventory, with flexible repayment periods. Without giving up equity in your business, you can secure the funds you need for inventory at up to 30% cheaper than other options. Kickfurther can help businesses purchase inventory while fostering growth and freeing up cash flow. Our funding model is unique and truly designed with the best interest of the future of every business in mind. Working with our community of backers, you can share your passion and successes to gain their buy-in. Before obtaining any inventory funding, you should have accurate financials documented. This includes how much loss you incur regularly. After obtaining inventory funding you will want to continue to monitor theft, as a general healthy exercise for the business.

How To Handle Post-Holiday Returns in Ecommerce

Posted on by BJ Scott

Holidays are a busy time in eCommerce. For a lot of companies, more orders go out in the last three months of the year than the first nine combined. Keeping up with the increased responsibility can be a full-time job, even if you have help shipping orders. But you don’t exactly get to just slip your shoes off and relax when the new year comes.

Imagine this: the holiday rush is over, and there’s a mountain of returns where your mountain of sales used to be. It’s a common scene – nearly 30% of all online purchases end up in the return pile, with that number spiking right around when stores stop stocking eggnog.

Post-holiday returns aren’t fun. There’s no way around this fact. Some companies even see negative revenue in the month of January because of them. But that doesn’t mean that post-holiday returns have to be a long winter slog.

How you manage returns can reinforce customer trust and help shoppers feel good, secure, and ready to re-engage for the next purchase. However, preparation is key!

In this post, we’re going to teach you the practical magic of transforming returns from a profit pit to customer retention opportunities. Every returned item is a chance to analyze what went right, what went wrong, and how to do better.

1. Focus On Stopping Returns Before They Start

Depending on when you read this article, you may or may not be able to cut down on returns for this year. But you can definitely cut down on returns for the next year. So why not start there?

Start by giving customers what they need to feel good about their purchases – crystal-clear images from multiple angles, highly detailed descriptions, and – especially for clothing – accurate sizing charts. As many as 76% of eCommerce shoppers seek out product descriptions when they’re making purchases. That ranks higher than reviews (71%), and images (66%) – and we know those are very important too!

It’s impossible to measure how much of an impact descriptions will have on a customer’s eventual decision to return or not return an item. This is especially true during the holidays when people are often shopping for someone else. But it’s also undeniable that this is quite possibly the easiest way to stave off returns.

Holiday Returns

2. For Unavoidable Returns, Make A Straightforward Return Policy

Finding – or understanding – a return policy shouldn’t feel like weaving your way through a maze. To that end, return policies serve two purposes:

  1. They are security blankets for nervous shoppers hesitant to make a purchase.
  2. They give your company a chance to make things right with customers so you can improve your odds of retaining them.

According to eCommerce Fastlane, more than 60% of shoppers look at return policies before making a purchase. Roughly the same percentage expect retailers to provide return windows of at least 30 days.

Your return policy should be accommodating to customers acting in good faith to the greatest extent possible without inviting return abuse. The best return policies usually meet the following criteria:

  • Easy to find. Customers look for them anyway, so they may as well be readily visible so the checkout process isn’t disrupted.
  • Clear. The do’s and don’ts are in friendly, plain language.
  • Long. Thirty days or more is ideal.
  • Backed by free shipping. About half of retailers provide free shipping on returns. But just about every customer prefers it.

Though eCommerce is well into the mainstream now, it still ultimately requires buying an item you can’t inspect in person. That means things can go wrong more frequently than they would in the store. According to WBR Insights, almost 9 in 10 customers are less likely to shop again with a retailer after a bad return experience.

The flip side of this is that showing customers you understand gives you a better chance to retain them in the long run.

3. Streamline the Return Process

When a customer decides to return a product, the ease of the process is often as important as the policy itself. An efficient, hassle-free return can convert a potentially negative experience into a positive one, encouraging customers to give your store another try.

Of course, you don’t want it to be a hassle on your side either.

To prevent that, you will want to start by creating a step-by-step guide for handling returns. This guide should be straightforward for customers to follow and internally for your staff to execute. With the right tech stack, you can allow customers to automatically pre-print return labels, submit information through online forms, and update them on the status of their return.

Preparing your staff is equally important. Training should cover not only the physical handling of returned goods but also customer service aspects to ensure interactions remain positive and professional. Being prepared for the post-holiday influx of returns can help maintain a high level of customer service during the post-peak season.

Warehouse

4. Figure Out How To Handle Return Exceptions

Even the best return policies need to account for the unexpected. Damaged or used items may require a different process than items returned for other reasons. Establishing a clear process for handling these exceptions is crucial. When in doubt, be generous to the customer when it seems plausible that the merchandise arrived defective or was damaged in the mail.

Some items can be restocked or refurbished to be sold at full price or a reduced price. However, for those items that cannot be resold, consider partnering with recycling firms or donating to charity, which can also enhance your brand’s social responsibility image.

Late returns present another common challenge. You will need to remain firm about your return window, or else you won’t be able to manage your inventory effectively. But it’s also equally important to be flexible in certain situations. For late returns, sometimes a middle path is the right one, such as offering store credit in lieu of a cash refund.

5. Balance Customer Service With Expense Management

Managing the financial aspects of returns is a delicate balance. Customers may expect full refunds, and you should make your best effort to provide them as often as possible. However, this isn’t always feasible or practical from a business standpoint, especially when the customer is not working within the return policy. For those situations, partial refunds, restocking fees, or exchanges can be fair compromises that also deter frivolous returns.

Optimizing this may come down to trial and error and it may need to be perfected over the next few holiday seasons. But it should never be too far from mind. Be sure to use data that you collect from returns to figure out how you can reduce returns first and foremost. Then figure out how you can reduce frivolous returns and optimize costs associated with returns management.

6. Use Returns To Ask Customers For Feedback

A return doesn’t have to be the end of your relationship with a customer. In fact, 92% of customers will make another purchase if the returns process is easy, according to the US Postal Service.

So when returns come in, use them as opportunities for engagement and gathering valuable feedback. Encourage customers to provide reasons for their returns as this information is critical for improving products and the overall shopping experience.

Use return data to identify trends or issues with particular products and take corrective action. This can turn a negative into a positive by demonstrating your brand’s dedication to continuous improvement.

When handled well, the return process can reinforce a customer’s decision to choose your brand in the future, converting what could have been a loss into a loyalty-building experience.

Final Thoughts

Mastering the post-holiday returns isn’t just about surviving an avalanche of unwanted gifts. You have more control than you think!

Set yourself up for success by preventing returns when you can and providing clear return policies when you can’t. When returns come in, make sure you know how to handle them and make sure the process is simple from start to end. Check in with your accountant every once in a while to make sure your profits are still healthy.

And as often as you can – engage with the customer and see what you can do better. Remember – the end goal isn’t just managing returns. It’s keeping customers for life!

5 Ways to Grow Your Brand

Posted on by Kaylyn Perry

Every brand starts with a vision. With vision, you know where you’re going, but you have to figure out how to get there. Keep reading to learn how to grow your brand and bring your vision to life.

How can I make my business grow?

You can make your business grow by increasing brand awareness through actions like creating content, posting on social media, engaging your audience, developing an email list, and getting others to promote you via word of mouth. Establishing a strong brand presence on social media and the web is key to making your new business grow and scale. Get noticed with a message that stands out and creative assets that present your brand in the best possible light.

In addition, business owners should work to maintain a positive reputation by always providing excellent service and a product of value. One customer’s experience – whether positive or negative – can have exponential effects on your brand’s standing among your target audience.

Know your brand’s story and what sets you apart from the competition. Having a clear idea of what promise you deliver to your customers is key to communicating this message well.

Taking these steps will lead to an increase in customer engagement and a higher sales volume.

What are the best ways to grow your brand?

​​When you are growing your business, you understandably want to focus your attention, time, and resources on the areas that will get you the most return on your investment. The approach to brand development has changed rapidly in recent years to keep up with new technologies.

Keep reading for the 5 most important steps to building a successful brand in today’s digital world:

#1 Be consistent

Consistency is key in everything you do from marketing and branding to writing blogs or posting on social media. Having a reliable content publishing schedule as well as a solid marketing plan will go a long way towards generating more brand recognition and raising your credibility.

All business owners must build trust and engagement with their customer base by providing quality content on social media as well as via email marketing campaigns and blog posts.

In addition, you’ll want to maintain a consistent look and feel throughout all of your content via the use of brand standards and establishing a brand voice. Think of how many people can easily identify McDonald’s by their signature yellow-orange color or Nike by their trademark swoosh.

Knowing your target audience will help you in developing a brand guide that can be used across all platforms and channels. Once you have put together a guide, you will want to use the same logo, colors, and fonts in everything you create and everywhere you share about your brand.

Be sure to use the same company name across all platforms including Facebook, LinkedIn, Twitter, Instagram, TikTok, YouTube, and email. It doesn’t help your brand if your company name on social media doesn’t match what is on the website or business card. For example, if your company name is Kim’s Coffee, be sure to sign up for accounts under @kimscoffeeshop.

Lastly, consistency with your brand’s customer service is key. Be sure to have all information listed clearly on your website and provide fast and reliable assistance every time.

#2 Start a blog and keep it updated

Blogs give business owners a way to create and distribute valuable content that keeps people engaged with your brand and coming back for more. Many growing brands have seen success with the development of a simple blog and content distribution schedule. For example, you can produce a new blog article every Tuesday that is then published on your website, sent to your email list, and posted on all your social media channels.

Starting a blog enables you to build strong and lasting relationships with your customer base.

#3 Utilize social media

Your brand should have a viable presence on all social media channels that are relevant to your business including Facebook, YouTube, TikTok, Snapchat, Instagram, LinkedIn, and Twitter.

The right social media content can boost your brand’s reputation, grow customer awareness, and generate sales leads. The most successful brands interact with their social media followers daily through videos, graphics, posts, quizzes, games, and contests. Consider utilizing extra features such as digital ads and live streaming to best leverage these media platforms.

Digital marketing is both an art and a science, and many brands hire an agency or contractor to manage their social media accounts for them. In addition to creating digital content and managing a posting schedule, these managers can also ensure that every customer comment on one of your social media channels receives acknowledgment and feedback. If social media marketing isn’t your forte, consider using the services of a creative team like Lab29.

#4 Have enough inventory in stock to support demand

All of the marketing and branding in the world doesn’t do your company any good if you don’t have enough products in stock to keep up with customer demand. For growing and well-established brands, inventory can be a challenge. Stocking inventory can tie up cash flow. Companies often find themselves in need of affordable inventory financing. The key word here is affordable. If you’ve done some looking around, you may think that does not exist, but it does. At Kickfurther you can access affordable inventory funding. In most cases, deals are funded within one business day but can be funded as soon as minutes or hours.

#5 Form strategic partnerships

Whether you utilize social media influencers or sign an agreement to work with other brands, forming strategic partnerships is one of the best things you can do to get your brand name out there. The more mentions your company gets on social media, the more you increase brand visibility and the potential for sales conversions.

The most successful partnerships in today’s digital world often involve paying those with large social media followings to promote your content to those outside your current customer base.

How Kickfurther Can Help

Kickfurther can help grow your business. With more available cash and more inventory, you’ll be amazed at the results you can achieve.

Kickfurther is the world’s first online inventory financing platform that enables companies to access funds that they are unable to acquire through traditional sources. With Kickfurther you can fund millions of dollars worth of inventory at costs of up to 30% lower than the competition. It gets better though – you don’t pay until you start making sales. You’ll truly have the opportunity to create a payment schedule that works for your business. You’ll outline expected sales periods to create customized payment terms. With more than $100 million in inventory funded to date, Kickfurther can help you get funded within a day or even minutes to hours. If your brand sells physical products or non-perishable consumables and has revenue between $150k to $15mm over the last 12 months, you are a prime Kickfurther candidate. 

Join 800+ Kickfurther inventory financing success stories and get started today with a free business account.

How to Transition from Crowdfunding to eCommerce and Grow your Business

Posted on by Pavel

Transitioning from a crowdfunding campaign to eCommerce can be an exciting and challenging shift for any business. It signifies growth and a prosperous future ahead. As you endure the challenge, keep your foot on the gas and think proactively. Note that there are distinct differences between crowdfunding and eCommerce funding. Understanding the two can help you time and execute your transition properly. 

Crowdfunding provides an excellent opportunity to validate your product or idea and get it off the ground, but eCommerce enables you to scale and grow your business beyond the initial funding stage. As you prepare to transition to eCommerce, choose the best platform(s) – this can make or break your success. Since day one, you should have prioritized partnerships with customers and suppliers, continue to do so. Lastly, make sure you have enough inventory to support growth while maintaining healthy cash flow, even if that means using inventory financing. At Kickfurther, we are here to help you make the transition and can fund up to 100% of your inventory, with flexible repayment terms you control. 

Interested in moving from crowdfunding to eCommerce? Here’s our best advice and hot tips. 

What is crowdfunding and what can it be used for?

Crowdfunding is a method of raising capital for a project or venture by obtaining small contributions from a large number of individuals, typically via the Internet. It has become an increasingly popular way for businesses to raise funds, especially for startups or small businesses that may have difficulty accessing traditional forms of financing. 

Crowdfunding can be an effective option for businesses of all stages but is especially effective for startups or early-stage businesses that don’t have a track record of sales or revenue. By utilizing crowdfunding, businesses can raise the capital needed to launch or develop products and can be used as a catalyst to expand sales or reach a larger target audience. While it’s to thank for the success of many ventures, there are risks associated so educate yourself and keep your eyes open. Nonetheless, as a business owner, all decisions are risk vs. reward-based, so do what you do best.

No matter the size or stage of your business, crowdfunding can provide the means necessary to validate demand for your products, thus allowing you to eventually transition into the world of eCommerce. 

When should you transition from crowdfunding to eCommerce?

After earning market validation from a successful crowdfunding campaign, you may be ready to dive into the world of eCommerce. Determining when to make the transition will depend on a variety of factors, including the type of business, the product being offered, and the level of demand generated through the crowdfunding campaign. 

Before making the transition, your business should have a clear understanding of the level of demand for your products, including a plan to continue generating sales beyond the crowdfunding campaign. Your business should also have an established brand identity that resonates with its target audience, highlighting the importance of having a strong consumer base. Once those are established, ensure your business has a plan for scaling operations beyond the crowdfunding campaign and has the infrastructure in place to handle increased demand for your products. If you’ve been using effective inventory tracking systems since the beginning, this will help you gauge how to keep up with growth without overstocking or understocking inventory. 

What is eCommerce? 

eCommerce, short for electronic commerce, refers to the buying and selling of goods and services over the Internet. It involves online transactions between businesses and consumers, or between businesses themselves. eCommerce transactions can involve physical products that are shipped to customers, digital products that are downloaded, or services that are provided remotely. 

In our oh-so-busy lives – eCommerce shopping has changed the way we shop. On the flip side, it’s changed the way businesses do business. As you enter the competitive eCommerce marketplace, pay attention to the small details, that customers will notice. Find ways to deliver personalized experiences without any human contact. eCommerce is extremely experience-based just as is in-person transactions, therefore your eCommerce partner holds a lot of weight on your customer’s experience. 

What are the top eCommerce sites?

Many eCommerce sites are operating globally. You may be familiar with all or some of the ones highlighted below, and if you’re not, you should be. Whether you are selling on popular eCommerce platforms or competing with them, an understanding of how they work can benefit you. 

#1. Amazon

Amazon is the world’s largest online retailer, selling a vast range of products including electronics, books, clothing, and household items.

#2. Alibaba

Alibaba is a Chinese eCommerce company that operates several online marketplaces, including Alibaba.com and Taobao, which are popular in China and other parts of Asia.

#3. eBay

eBay is an online marketplace that allows individuals and businesses to buy and sell goods, from electronics to collectibles.

#4. Walmart

Walmart is one of the world’s largest retailers, with a significant presence in both physical stores and eCommerce.

#5. Shopify

Shopify is a leading eCommerce platform that enables businesses to create and operate their own online stores.

#6. Etsy

Etsy is an online marketplace that specializes in handmade and vintage items, as well as unique and creative products.

#7. Target

Target is a large retailer that operates both brick-and-mortar stores and an online store, selling products ranging from clothing to home goods.

6 Tips for Transitioning from Crowdfunding to eCommerce

Tip #1 – Create a website: Websites are a valuable way to not only sell products but also share information about your brand. Building one sooner than later, is a wise investment, but a website is especially valuable as you transition to the eCommerce space. 

Tip #2 – Stock plenty of inventory: To meet the demand generated through crowdfunding campaigns and beyond, it’s crucial to stock plenty of inventory. When we say plenty we mean just the right amount. Overstocking inventory can be a problem. We highly encourage business owners to utilize inventory tracking tools to understand demand, and how it changes. These tools come with plenty of other benefits too. As a business that’s new to eCommerce, you may struggle to secure inventory financing. Thankfully though, there are solutions available to help you access the funds you need for inventory. Kickfurther was founded by an entrepreneur who once struggled to find accessible and affordable inventory financing. And just like that, he turned his problem into a solution for himself and others too. For inventory funding that’s enjoyable to secure (and up to 30% cheaper than other options) visit Kickfurther. 

Tip #3 – Partner with eCommerce platforms: Partnering with eCommerce platforms can help increase your online visibility and sales. Consider selling your products on popular platforms like Amazon, eBay, or Etsy, in addition to your website.

Tip #4 – Plan for the long-term: Transitioning from crowdfunding to eCommerce is a long-term strategy, so it’s important to plan accordingly. This includes developing a business plan, setting goals and milestones, and regularly reviewing and adjusting your strategy as needed.

Tip #5 – Establish a well-loved reputation: Building strong partnerships and relationships with suppliers and customers is essential for long-term success. This includes delivering excellent customer service, offering quality products, and maintaining open and transparent communication. 

Tip #6 – Deliver high-quality products (and collect reviews that make you stand out): The quality of your products can make or break your eCommerce business. Make sure to deliver high-quality products that meet or exceed customer expectations. Collecting positive reviews and feedback can also help build your reputation and stand out from competitors.

Closing thoughts

Making the transition from crowdfunding to eCommerce first requires a successful crowdfunding campaign and careful preparation for the next steps, to ensure your business can meet ongoing demand and ensure long-term success. Remember, the eCommerce game is best suited for those in it for the long run, so make sure you have a plan to scale your business and the appropriate partnerships in place to ensure you can successfully make the transition into the world of eCommerce. 

How Kickfurther can help

Meeting the growing demand for your products is no easy task after transitioning to the world of eCommerce, but by partnering with Kickfurther, we can help cover your largest expense – inventory! Offering inventory on consignment, we can fund up to 100% of your inventory orders with a flexible repayment plan that puts you in control. At Kickfurther, we understand you have enough on your plate to focus on growing your business and can help you secure the funds you need for inventory without forcing you to take on debt or give up equity. Why? Because when we said we got it, we meant it. 

Interested in getting funded at Kickfurther? Here are 3 easy steps to get started:

#1. Create a free business account

#2. Complete the online application 

#3. Review a potential deal with one of our account reps & get funded in minutes

How to Analyze Inventory on a Balance Sheet

Posted on by Pavel

On your balance sheet, inventory should be categorized as a current asset and should include raw materials, work-in-progress, and finished goods. Since inventory is extremely liquid, the balance sheet needs to be tracked to the most current state to remain accurate. Properly managing inventory can position businesses to be ready to grow, utilize financing, identify opportunities, and so much more. As you implement best practices your business can be one step closer to reaching its full potential. So, here’s what you should know about analyzing inventory on a balance sheet. 

The importance of analyzing inventory for businesses

Inventory is a major investment for most businesses. Failing to analyze inventory can be the start of a domino effect for negative impacts. The most important reason to analyze inventory is to know just how much inventory you need. When it comes to inventory, too much or too little can cause problems. Therefore, you truly want to know just the right amount to protect cash flow and capture as many sales as possible. Remember that the right amount can vary depending on sales trends so inventory needs to constantly be analyzed. 

Types of inventory

As we mentioned earlier, inventory is included on a balance sheet as a current asset which includes the following:

  • Raw materials inventory: Raw materials are classified as materials that are used to create and finish inventory. By the time the end product is complete, these materials are often unrecognizable, which can make them harder to account for. No matter how small a material is, it should be accounted for. 
  • Work-in-progress inventory: Itemizing work-in-progress inventory can get a bit more complicated as it can include raw materials. Work-in-progress should include inventory or items that are currently in production and can include overhead packaging materials, and labor. 
  • Finished goods inventory: Let’s keep this simple – items that are ready to sell. 
  • Consignment inventory: If you sell inventory on consignment, you could classify inventory that is being held on consignment. 

The idea here is to know where inventory is as it flows through production. As you can imagine this gets complicated when tracking manually so it can be extremely beneficial to invest in inventory management systems to keep your balance sheet and inventory count accurate. If you don’t manufacture products, tracking inventory is simpler, but should not be overlooked. 

Analyzing Inventory Ratios

  • Inventory turnover ratio = cost of goods sold / average inventories
  • Gross profit margin = (revenue – cost of goods sold) / Revenue
  • Days in inventory = days sales in inventory / (inventory/cost of goods sold * 365)
  • Stock-to-sales ratio =  average stock value / net sales value

Tips to identify inventory trends

To effectively identify inventory trends you’ll need sales for an extended period under your belt. While inventory management is often overlooked in the infant stages of a startup, this can be a costly mistake. The sooner you start collecting data and monitoring sales, the sooner you can understand and track trends as they relate to your business. Some industries may see trends and while it’s important to be aware, it’s more important to understand the trends of your business. 

Here are 3 tips that can help identify inventory needs:

  1. Monitor highs and lows
  2. Implement an inventory management system
  3. Collect data to understand the driving factor for the trend 

Identifying Risks and Opportunities in Inventory Analysis

As a business owner, risk is impossible to avoid. However, whenever possible, business owners should understand risks and how to control them. Thankfully, when it comes to inventory there are proactive approaches to managing risk. Here are some risks to be mindful of as you build your strategy. 

  • Overstocking and understocking risks: Overstocking inventory can result in cash flow problems, loss of value, increased costs, and more. Understocking inventory can result in lost sales. Neither present risks that need to be taken, even more reason to invest in inventory management to stock just the right amount of inventory. Running an efficient operation can save money and improve performance all around. As a business owner, it’s always important to take a step back to truly understand the impacts of all decisions. By managing overstocking and understocking risks you can fulfill orders faster, improve customer satisfaction, free up cash flow, and so forth. All positive impacts. Of course, there’s always the risk that products won’t sell or trends will change but that’s a whole other topic. Do what you can with what you know. 
  • Obsolescence and spoilage risks: Products can lose their competitive edge or become obsolete as they can spoil – both have the same impact. The variance here is the type of product we are talking about. If you fear either of these risks, consider monitoring inventory more closely, finding ways to sell what you have before it’s too late, or discontinuing the product altogether. It’s tempting to keep products around as long as possible but it may be a better business move to shift your resources into new products if you feel either of these risks are present. 
  • Opportunities for growth through inventory optimization: Optimizing your inventory allows you to lean operations, creating tremendous growth opportunities. When we talk about risk, opportunity usually isn’t far away. As you find ways to mediate risks, focus on the opportunities that can stem from the solutions you pose. As a business owner, always look ahead, keep a good attitude, and work to uncover hidden opportunities. 
  • Opportunities for cost savings through inventory management improvements: Investing in inventory management can cut costs including storage fees, liquidation, interest in inventory loans, and so forth. 

Closing thoughts

A balance sheet is designed to provide a detailed overview of assets, liabilities, and capital at any given time for a business. Product-based businesses must include inventory, at all stages, on their balance sheet. While you can achieve success by shortcutting this, it’ll catch up to you in the long run. Plus, if you need funding for inventory or operations, you’ll likely need a record of sales and a healthy balance sheet. 

To recap, some steps you can take to analyze inventory include:

  • Identify all types of materials and stages of production 
  • Invest in inventory management systems 
  • Identify all costs associated with inventory 
  • Track sales trends 
  • Gather consumer data to understand trends 

As your business grows, the need for funding may arise. At Kickfurther you can get inventory now and pay later, all while having fun doing so. Our platform connects business owners to a community of backers that can fund up to 100% of inventory. 

  1. No immediate repayments. You control repayment. Don’t pay until your product sells.
  2. Non-dilutive. Maintain equity in your business, we know how hard you worked for it. We are here to work with you, not against you. 
  3. Not a debt. Because you have enough financial strain, this is not a loan. 
  4. Upfront capital. Pay suppliers faster with upfront capital, there when you need it. 

When you turn to any type of inventory financing, you’ll need to present the facts and financials to prove your ask. Analyzing inventory at every stage of growth equips you with the information you need to get buy-in from lenders or other sources that can provide funding. Plus, it allows you to clearly navigate the path to success. It’s scary to face reality in some circumstances, but the sooner you do it, the sooner you can find solutions to problems – which we know is what we entrepreneurs do best! 

How to Write a Business Plan to Secure Financing

Posted on by Pavel

Whether you are applying for a loan or not, a detailed business plan can help set you up for success. The process of creating a business plan can be an opportunity to reflect on the future success of your business and how you will get there. Business plans can be revised as needed but should serve as a vision for what you’re working to build every day. 

What is a business plan?

A business plan is a detailed document that outlines a business and its objectives and plans to achieve them. Intended for an external and internal audience, business plans can be created for new or well-established businesses. Business plans can be used to capture investors, secure loans, or establish alignment with executives or employees. Business plans should be reviewed periodically and updated to ensure they remain current. When creating a business plan, it’s important to ensure it’s concise but detailed. It should include an executive summary, mission statement, products, services, finances, marketing strategy, budgets, and more. Any part that plays a role in bringing the vision of your company to life should be included. 

How business plans can be used to help you secure financing

Lenders need to buy into the financial future of a business with confidence. While black-and-white documentation such as profit and loss statements can help them do that, they often want to see the future potential of the business. When applying for a loan lenders want to know what the funds are to be used for. They also want to see where current funds are being allocated. A business plan can draw a detailed picture of the lender so that they can unlock the confidence they need to approve a loan. Of course, other documentation will likely be required too, a detailed business plan can certainly help. 

What should you include in a business plan to get funded?

Presentation matters when it comes to a business plan. To ensure completeness, do a thorough review to make sure all you need is included. While what is appropriate can vary, here are some key components that most business plans should include. 

  • Cover page: Including a cover page followed by a table of contents is a good way to organize and set up the presentation of a business plan. While a business plan is a way to deliver information, it’s also a way to show off your brand and creativity. Help your business stand out with a little bit of pop. The goal should always be to make people feel connected to your brand. 
  • Executive summary: Business plans should include an executive summary. An executive summary should be a high-level overview to describe your company, products, history, path forward, and such. It should summarize your business plan within one page. Think carefully about how and what the summary says – it’s more important than you think. 
  • Market analysis: In our competitive world, you’ll need to demonstrate that you have a competitive edge. By showing a market analysis and your understanding of it, a business plan can demonstrate the likelihood of your success. 
  • Products and services: In a business plan, products and services should be highlighted. Summarize what you do, what you sell, and how you meet customer needs. Pricing can be included too. 
  • Growth opportunity: Identifying ways to grow can demonstrate to lenders why you need to borrow money. By not only painting a picture of what success looks like but laying out how to get there, you can earn buy-in. Be sure to support this section with facts and detailed events that will pave the way. 
  • Finances: Lenders want to know that even though you need to borrow money, your business is financially sound. While you may want to make the numbers appear better than they are, we urge you to adhere to the side of truth as it can cause problems to extend the truth. 

Tips on how to write a business plan for securing funding

Words are incredibly powerful, and presentation is key. Consider both of these factors when putting together a business plan. While you want to share your brand and culture with lenders or backers, you also want to provide accurate and real information that can aid them in making decisions. 

  • Show off your brand

While a business plan is a serious document, you still want to tactfully display the personality of your brand – in everything you do. Parties that view your business plan should be able to connect with your brand and understand the values you stand for. As you craft your plan, keep it to the point, but have fun with it. 

  • Ensure information is up to date

Business plans need to be updated from time to time. Not so often that there’s no follow through on ideas, but often enough to where it’s always current – even if you are not using it to get a loan. Business plans should be ready to go at all times. After all, planning is critical. 

How Kickfurther can help

Getting funding can be a challenge, and while a business plan can help, there’s more to it than that. Other considerations such as the pros and cons and cost will need to be considered. Regardless of how established your business is, you’ll need to find an option that works. At Kickfurther we help small businesses access working capital to fund inventory. Fund up to 100% of your inventory while providing flexible payment terms that you control. Enjoy no immediate repayments and a non-dilutive funding solution that’s up to 30% lower cost than other options. Plus, funding at Kickfurther is not a debt. Our community of buyers can review your business profile allowing you to find like-minded partners. 

Closing thoughts

Part of your business success is your ability to present products and services that sell. Revamping or creating a business plan can help you secure the funding you need. 

Grow your business with working capital. Create a free business profile at Kickfurther today!