March '15

For the Business of Apparel Decorating

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98 | PRINTWEAR M A RC H 20 1 5 Optimize Your Inventory your business already uses QuickBooks or Sage, you have inven- tory software that can be integrated with accounting, which is optimal. If you don't have those, simple software for your PC, Mac, or smartphone is available. There is no shortage of apps and programs to manage inventory. Jump on Google, Bing, and YouTube for 15 minutes, and you'll find one that is simple to use and ready to start today. Once you're up and running, you're ready to stay organized. 5. TAKE A LOOK BACK Now that you're organized, cleaned, and prepared for the future, take a look back. Review old supply invoices and orders. Count how many shirts of various colors and sizes you purchased. De- termine how many cones of a certain colored thread you use each month on average. Data is beautiful. You can use this past data to predict the fu- ture. If you've used one liter of white ink a month for the past 19 months, you'll likely use a liter this next month, too. You have to look back and find the trends and averages. There is one caveat, though: Don't spend too much time going through all of your history. Orders are unique, style and color trends change, and so does the economy. The past won't deter- mine the future, but you should seek consistent history. You're much better off dedicating most of your time to the previous steps. What's fantastic is that next year, and five years from now, it will be easy to track past data because you have set up software to track consumables as they enter and exit your inventory. 6. FORECAST As mentioned above, you cannot predict the future, but you can use your past knowledge to forecast what will happen in the upcoming months. Learning to forecast each quarter of the year is one of the best skills for saving both time and money on supplies. A perfect example is your white shirt sales. If you know that you'll go through 1,000 white shirts in June and July, prepare for this. Take advantage of sales to stock up on something you know will get used in the near future. The same with supplies. If you go through 10 cones of black thread each month, buy 20 when they are on sale. It's not necessary to be a guru of future predictions, but you should know the pulse of your consumable inventory. Never run out of supplies. This is something that I could repeat over and over again. You should only run out of supplies when you have a large influx in sales—an unpredicted spike. Even then, you can usually resupply quickly. If you need essential equipment supplies, always keep a weighty but conservative stock. Make it a point to never run out of the essentials: backing, ink, needles, crystal rhinestones, machine oil, and other items you use for almost every order. Simply keep a watch over your past, look out for trends, and resupply sooner rather than later. 7. FIRST IN, FIRST OUT This is a simple concept to follow. Use the ink you ordered first, and don't open a new bottle or bag of supplies until the old one is finished. This keeps your supplies fresh and prevents waste. It isn't much different from potato chip bags. I don't want my family opening 10 bags of chips at home; eventually, some will go stale. Don't let your supplies go stale. It's a waste of time and money. If your business has less waste, it has more profit. Practice first in, first out for everything in your shop. This is surprisingly simple and often forgotten, so you may find it useful to put up a sign as a reminder. 8. ADAPT AND EMBRACE CHANGE The final step is adapting to changes in your business. If you find that printing business is up and embroidery is down, adjust your supply purchases and inventory space to accommodate. Have reg- ular inventory counts, whether it's weekly, monthly, or quarterly, depending on your business. As you count, keep a history of what has changed and learn from those lessons. Also, consider discussing different options with your custom- ers. If particular colors or styles change in pricing, see if they are interested in a change. If you have a heavy inventory on certain consumables, offer a better deal on those to clear your overstock. DON'T GET IN A LOSE-LOSE SITUATION Bad inventory and consumable management can literally destroy a business. You can waste huge sums of money in expired sup- plies when overbuying or practicing anything but first in, first out. Your business could lose a large percentage of profits when paying for overnight shipments instead of standard ground. Customers can be disappointed if you don't fulfill their orders as promised. The worst is when all of these come together in the perfect storm, and you end up losing money on the deal while leaving a customer unhappy. A business with a well-managed consumable inventory will run better in all aspects. Simply looking at how a business orders supplies is a prediction of how well it grows and succeeds. pw

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