Sunday, 30th June 2019 | Sales,Management
7 Tips to Avoid Spoiled Inventory
With an inventory management system in place, businesses can optimize their workflows and their product spend in order to keep goods moving and avoid spoiled food.
Managing inventory can be a challenge for any business owner. But when it comes to controlling perishable items such as food, inventory management is a mission-critical task given that the health and safety of your customers is at stake. Shelf lives and expiration dates cannot be ignored when you own a restaurant, supermarket, bakery or another establishment that retails goods with a “best by” date. In addition, much like with non-perishable items, keeping your inventory moving well before its expiration date is essential for you to see a return on that investment.
Below, we’ll take a look at inventory management essentials, along with seven essential techniques to avoid spoilage and food waste in your inventory.
What is Inventory Management?
The primary goal of inventory management is to keep track of the items you accept, hold and sell by providing insight into the weight, amount, size and location of each product. Consider it a 360-degree view of your inventory so that you know when to replenish goods. Without this insight, businesses are left guessing about their holdings and are bound to make mistakes that will impact cash flow, including:
- Missed sales opportunities due to insufficient inventory.
- Wasted spend on excess items that you don’t need.
- Lost revenue on dead stock: items that are out of season or irrelevant.
- Food waste from excess or slow-moving goods.
With an inventory management system in place, you’ll have better insight into the products you do have (and the ones you need) so that you can optimize your inventory.
How to Prevent Food Waste with Inventory Management
Regardless of which specific inventory management system or software you use to identify the goods you have on hand, there are many added techniques that will help you to optimize your inventory control and avoid spoiled food.
1. Follow the “First In, First Out” Model
Put simply, the FIFO model means using or selling your oldest stock first before it spoils, and replenishing your inventory from the back. To execute this model, you’ll need to ensure your storage space or warehouse is optimized to restock inventory from behind so that older goods are at the front and ready to be used.
2. Set Inventory Par Levels
These levels dictate the minimum amount of each item that you need to have on hand at all times. If your current stock is lower than par level, you know it’s time to order more. But instead of placing a large order that may go to waste before it sells, consider placing a smaller order to simply bring the item back up to par, without going over.
3. Organize your Storage Space
Keeping all of your goods organized, not just the perishable ones, goes a long way to prevent food waste. Label the shelves of your cooler, freezer and dry-storage areas so everyone knows where an item belongs, as well as when it arrived and when it will expire. If every item is in its place, it’s unlikely that you’ll have to toss any inventory that was misplaced and therefore expired. Once your items are unloaded into their proper homes, keep them safe by ensuring your storage spaces, freezers and coolers are each set to the proper temperature.
4. Connect with Your Suppliers
A good relationship with your suppliers can go a long way in preventing food waste. For example, ask to negotiate a minimum order quantity so that you can carry less inventory and avoid spoilage. Or, if you’re taking advantage of a special but won’t be able to use all the goods right away, ask if your supplier can deliver the items in various stages of ripeness so the shipment will last over a longer time period.
5. Conduct Spot Checks
Conducting small inventory checks throughout the year can help to identify imbalances more quickly and avoid spoiled food. You may find that you need to readjust your par levels or start ordering less of an item if it’s not selling as well as you thought it would. If you own a restaurant and find yourself with an excess of one food item during a spot check, get creative and cross-utilize it in other dishes. In retail, if a perishable item isn’t moving, consider running a promotion to sell it off quickly before it spoils. This could help you avoid having to introduce price increases to compensate for food spoilage.
6. Inspect your Shipments
Thoroughly, inspect all shipments as soon as you receive them, not just the items at the top of each package. If items arrive damaged contact your supplier right away and send them back. If this becomes a common problem, it may be time to scout out a new vendor. If you receive refrigerated items, ensure they’re delivered at the required temperature and then quickly transfer them to your own cooler.
7. Make Inventory Management a Team Effort
Train your staff to understand your inventory process. Educate them about your product categories, purchase units, issue units and inventory list. With everyone on board when it comes to inventory control, you’ll be able to gain much-needed feedback from your staff about inventory volumes and identify potentially overlooked pitfalls that could help you avoid spoiled food in the future.
While every business is bound to have some amount of food waste, implementing the above inventory management principles can go a long way in protecting the health of your customers and your company. With better insight into the goods you hold, you can significantly reduce waste and optimize your inventory.
5 important considerations when applying for a business loan
Managing money is one of the key tasks of running a small business. Changes in facilities or staff, acquiring inventory, or just the natural ebb and flow of your industry can all affect your cash flow. This is why business loans are commonplace. They play an important role in financial viability. This said, deciding to take a loan—and selecting the institution to take it from — shouldn’t be done lightly. Before you decide, here are five things you should consider.
1. What do you need the loan for?
This is a question to ask yourself, not to justify that decision to take out a loan, but to clarify the best products and terms for your needs. Once you’ve determined the purpose of your loan you can pinpoint your best option.
2. How much do you need?
While carrying debt is not, in and of itself, a bad business practice, taking as much as you can get is risky. Your debt load can affect everything from day-to-day operations to your credit score, so after you identify what you need the loan for, put a realistic number on your project.
3. How much time do you have?
If you need funding quickly, you’re going to want to work with a lender that’s equipped to meet your timeline. Traditional bank loan applications are cumbersome to complete, and it can take a long time before you’ll have access to the funds. Private lenders simplify their application process and can get your funding, fast—sometimes as soon as 48 hours, however, the rates tend to be higher than with the big banks.
4. Do you need a lump sum or are incremental amounts better?
Your answer to this question will help you decide the type of loan that’s best for you. Traditional banks offer lines of credit where you can take out payments on an as-needed basis, but if you need your money upfront, you’ll probably want to apply for a term loan. This is a loan that granted in a lump sum with regular repayments until the balance is paid.
5. What is your existing debt load?
Before applying for a loan you’ll need to inventory your current debt load. If you’re already carrying debt, you must first calculate how much more you can afford. Taking on debt is normal—but taking on too much debt will put the company in a precarious financial situation. At iCapital, we’ve helped dozens of small business owners make this calculation. It’s surprising how many people apply for additional funding when it would be the business is an extremely precarious position. Ensure that you are on the path to success rather than bankruptcy by doing the math before submitting your financing application.
In the end, selecting the right institution to borrow from, and amount to ask for, comes down to identifying what you need, what you can get approved for, and what you can realistically pay back. With this approach, you’ll be taking on healthy, planned debt rather than putting your company at risk.
Small business financing Canada ,Accounting
Food Trends in Canada
Is there a secret to success in the restaurant business? We’re not sure, but if you have it, we’d like to chat.
Until then, it helps for you to stay informed about the ongoing changes in the marketplace. The sooner you identify and take advantage of new trends, the more you will benefit and the easier it will be to adapt to future changes.
Below are five trends worth watching:
- Fewer Menu Items - With customers valuing the ‘experience’ of dining out, more restaurants will stop trying to cater to every taste. Instead they will look at menu themes or focus on a few dishes that they do exceptionally well.
- Now You Need to Satisfy Both Boomers and Millennials - One wants healthier options and the other wants to deal with more connected and responsible businesses. And both of them have money to spend. Boomers will appreciate more gluten-free, low-salt and vegetarian options. Millennials will need to hear about you on Instagram or other social media, and they want to know that you offer socially responsible foods, like free-range chicken.
- Beverages Refined - While different, more exotic dishes have been an ongoing trend, in 2015 that trend will shift to your beverage menu. You will see a wider variety of teas and coffees (even Tim Horton’s now has its Dark Roast option), exotic juices and alcoholic options that include ciders (gluten-free), low-alcohol choices and oil-infused cocktails.
- More Hybrids - It started when chef Dominique Ansel combined croissant and donut pastry dough to create the Cronut in 2013. In 2015, the hybrid trend will grow to include dishes like ramen burgers, brioche/souffle mix (another mash-up from Ansel) and dessert pizza.
- Localization & Personalization - In 2015, local restaurants will continue to battle their big-box cousins for the hearts and tastes of diners. Two powerful weapons in that fight will be menu items made from local foods and offering customers more ‘choose your items/ingredients’ options.
Remember, no matter how hot the trend, what works for one restaurant doesn’t always work for another. Stay informed, talk to your customers and find out what works best for your business.
What to do if a bank won't give you a business loan
It’s the nature of business to need funding on occasion. Renovations, new hires, inventory purchases, and slow days can send business owners in search of a loan. But what if the bank won’t approve you, or you don’t have time to go through their cumbersome application process? Suddenly, “business as usual” is a much bigger, more stressful problem. This is why private lenders are a go-to for Canadian small businesses—they present fewer hurdles and get money into your hands faster.
Private lenders vs banks
When considering lenders, it’s a mistake to think of banks and nobody else. While banks enjoy name recognition and a reputation for longevity, there are other, modern options. Private lenders like iCapital are an excellent alternative for small business owners, in many cases exceeding what’s on offer from the big banks.
Banks tend to be extremely risk-averse, even refusing to loan to businesses in riskier sectors like restaurants and retail. And, even if they will consider your company, their application processes are onerous and slow, causing an additional time burden while you wait for an answer. Private lenders like iCapital operate very differently. Using a simple, less restrictive, online application, we strive to make the process easy and fast. Applicants can expect their approval within 24 hours and funding the day after. And, private lenders’ standards are less strict and more inclusive, so we lend to more businesses—even people with low credit scores.
What are the different types of business financing?
If you’re approaching a private bank for a business loan, the first decision you’ll want to make is what kind of funding product is best for you and your situation. The three most common funding options are:
- Merchant cash advance - Companies that do a lot of debit or credit transactions might benefit from this kind of lending option because repayment is on a percentage of the day's sales. If your business has a quiet day (or even season), you won’t be stuck trying to come up with repayment while you have no money coming in.
- Term loan - This is a very standard kind of loan where you receive a certain amount of funding and repay a set amount on a set schedule until your loan is discharged. This works well for those who want to know exactly how much they owe and when payments are due.
- Secured loan - With the pledge of an asset, you can take out a secured loan. In general, you can get a better rate with a secured loan, but unsecured loans can be the way to go for small amounts as they are uncomplicated to negotiate. Your decision between secured or unsecured funds will depend on your specific situation.
Taking out a loan shouldn’t be a job in and of itself. If a bank turns you down, or if you need money quickly, consider a private lender. Their faster, simpler application process means you can put your energy where it belongs—back into your business.
Small business financing Canada ,Business loans for bad credit
Efficiency sparks joy: How to Marie Kondo your business processes
Though unlikely, it is possible that you’ve somehow missed the surprising success and sustained popularity of Marie Kondo, the woman who built an empire on the concept of tidying up. Even if you’ve failed to read any of the self-styled organizational guru’s books on the subject or to binge on the Netflix series, you’ve almost certainly heard people using the now-ubiquitous phrase, “spark joy”. In the past several years, we’ve learned to question whether objects, relationships, or even life choices spark joy, and to do away with anything that fails to meet this criterion. One thing is for sure: Marie Kondo has led the way in thinking about decluttering and organization—two real-world ways to improve efficiency. And efficiency, in the business world, is about as joy-sparking as you can get. Read on to learn more about how to Marie Kondo your business processes for a leaner, more cost-efficient organization going into the new year.
Step 1: Start with gratitude
Especially important if you’re working with a team but helpful even for solo ventures, start by acknowledging your strengths and successes. Decluttering should not be an indictment but rather an evolution. There is always room for improvement.
Step 2: Tackle one area or process at a time
Every business has numerous processes to meet their organizational goals, each with its own peculiarities. Although they may be linked, it is better to begin with one and see those changes through before tackling another. If your supporting processes like accounting or recruitment are most inefficient, start there. If the biggest difference would be made with a change in operational processes, that’s the best place to begin. These are changes that will spark the most joy in terms of employee satisfaction, customer service, or even your bottom line. Having a success story from the start will encourage your team to continue..
Step 3: Perform an audit
On her show, Kondo always begins by laying out all of the contents of an area or room in one place. Her thinking is that you can visualize everything and take stock. For your business process, this could be done with your team during a brainstorm session. On a whiteboard, map out the process from start to finish. Consider everything from the employee perspective and from the customer perspective. Next, mark which steps are working well (in green marker), which are satisfactory (yellow), and which need improvement (red).
Step 4: Time to tidy up
Make a plan of attack for the improvements. Determine who will take responsibility for each piece of work. Set a deadline to come back together to gather feedback on the process changes. Working in pairs or teams can make the work go faster.
Organizational clutter is the natural result of work. Over time, processes degenerate or fall behind current knowledge or technologies. Plan for regular clean-ups, whether they’re once a quarter or once per year, and let your joy be sparked by your business’ efficiency, as tidy as Marie Kondo’s famous drawers of perfectly folded clothes.