Archive for December, 1998

Inventory All Your Assets at Year-End

Posted: December 21, 1998 by Sutton Landry in Money, Operations, Planning

Classic Cincinnati Post column from 1998

December is a month of mixed blessings for small business owners. For retailers, many of whom will do as much as 45% of their total annual sales during the month, December sales are absolutely vital, and they look forward to them with anxious anticipation. But regardless of what holiday season sales are, small business retailers, and manufacturers, know that at year-end they will face one of their least favorite tasks — the dreaded annual inventory.

This year I’d like to suggest a different approach to year-end inventory. By all means count all your merchandise, raw materials, and work-in-process. But do more than just count it. Analyze it, too. And while you’re analyzing your inventory, take time to analyze your other assets as well, assets like your planning processes, your capital equipment, your operating space, your employees, your customers, and your professional advisors.

As a small business owner, you have limited resources. That is a given. In practical terms it means that you can ill afford to have those limited resources invested in unproductive assets of any kind. As you inventory each asset category, you want to identify unproductive assets that you can sell off, thereby generating cash for new opportunities that will help you grow and improve your profitability.