Small businesses account for more than 50% of employment in the United States, and businesses with at least one employee other than the owner have a surprisingly good survival rate through the first few years. However, only half of those businesses see year five, and just a third make it to year 10. How can businesses struggle so much after making it through the first two years? More often than not, money is the deciding factor. A business could be profitable on its income statement and still run out of cash. A balance sheet is a better meter of success than an income statement. Without cash, bills are not paid and doors don’t stay open.
Inventory has to be managed properly, and any future investments in inventory must be thought through properly. Inventory is necessary for success, but too much inventory could doom a business. Cash can be turned into inventory quickly, but inventory might never turn back into cash. There is no foolproof way to handle inventory, but the following concepts can be applied to almost any business:
If you think about it, managing your inventory isn’t so different than buying groceries for your home. People tend to buy just enough groceries to get through a week or two. They don’t intentionally buy anything that might go bad before it can be eaten. Small business owners must remember that cash keeps them alive. Managing expenses and inventory will help small businesses maintain the cash needed to survive.
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AML was founded in 1983 to respond to a need in the barcode data collection marketplace for high performance, easy-to-use, and cost-effective barcode and data collection products. Our goal is to provide sensible solutions for mission critical activities, to improve efficiency and productivity, and to make barcode data collection applications worry-free.
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