12 Types Of Inventory For Business
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Many managers feel that bar inventory is a complex, time-consuming process that doesn’t serve any real purpose. Done right, though, it can reveal a great deal about how your business is running and keep your bar on the road to profitability and success.
In this article, the experts at Sling tell you how to take inventory in just four steps and give you some expert tips to make the whole process easier.
Counting product during your bar inventory process is more than just tallying bottles. It requires either estimating or determining accurately how much product is left in the container.
You can estimate by using the point count method. If you want a more accurate inventory, calculate the weight of the liquid remaining in each bottle.
Here’s a basic description of each procedure.
The point count method involves dividing each bottle into tenths from 1.0 (full) to 0.1 (almost empty). Don’t take this literally and draw hash marks on all your pretty bottles. Just “eyeball” the level of liquid and record the number on your bar inventory sheet.
Weighing the bottles and their contents gives you a more precise measure of your remaining inventory. Many inventory apps come with their own scale to make this process even easier.
Regardless of which method you choose, the final numbers are your starting inventory, which we’ll use later to calculate other important information
During the days and weeks after you count your product on hand, enter the amount of product you purchased from vendors (a.k.a. received inventory).
You will use this number at the end of the cycle (i.e., during the next inventory) to calculate metrics such as usage and monthly pour cost percentage.
If you conducted your previous bar inventory on the first of July, for example, schedule a time for your next count on the first of August.
This number is your ending inventory. Use it with the other two numbers in the next step.
To calculate product usage, plug your bar inventory numbers into the following formula:
Usage = Starting Inventory + Received Inventory – Ending Inventory
Let’s say your starting inventory for rum is 750 ml. You purchased another 750 ml bottle (received inventory) in the month after your first count. Thirty days later, your ending inventory for rum is 900 ml.
Here’s how those numbers fit into the formula:
Usage = 750 ml + 750 ml – 600 ml
Usage = 1500 ml – 600 ml
Usage = 900 ml
From this number, you can get a more accurate idea of how much rum to keep on hand to satisfy the demand of your customers.
There’s no reason to keep a whole year’s worth of inventory on hand. It’s an added expense your business doesn’t need.
Most successful bar owners recommend maintaining a 15% inventory. When you divide your total inventory on hand (in wholesale dollars) by your total monthly bar sales, the end number should be around 0.15.
Arranging your bar inventory records alphabetically may seem like a good idea, but you probably don’t store the bottles that way on your bar.
Your inventory sheet should match your storage method so you can go down the line — from right to left or left to right and bottom to top or top to bottom on the bar — during the counting process.
You can take inventory as many times during the month as you deem necessary. Just be consistent so your numbers match up.
Don’t take one inventory on the first of the month, the next inventory two weeks later, and another inventory three weeks after that.
You’re only setting yourself up for difficulty if you change the way you conduct your bar inventory every time. Having a detailed system in place makes the process faster and easier.
For example, if you count product by starting at the top left of your bar (if that’s how you store the bottles), start in the same place the next time through.
You don’t have to conduct the bar inventory yourself every time. Train your team members to make the count so they can see what goes on behind the scenes of your business.
Be sure to encourage them to watch for such issues as:
When you and your team are all involved in the inventory process, it will be much easier and go much smoother than ever before.
If you conduct your bar inventory with pen and paper or an Excel spreadsheet and it’s working well for you, then, by all means, keep doing what you’re doing. There’s no need to reinvent the wheel.
But if you feel like you could exercise more control over the process, specialty software can help. Apps like Bar Patrol or BevSpot can help reduce the headaches associated with calculating usage in your bar.
Scheduling software like Sling reduces the time it takes to satisfy all the variables associated with creating, distributing, altering, and finding substitutes for your team schedule.
The Sling suite of tools includes:
With Sling, you can conduct all of your workforce management activities in one place instead of cobbling together various separate apps that don’t integrate well with each other.
No matter the size of your business, the Sling app helps you build your team’s work schedule in minutes rather than hours.
That can give you more time to perfect the way you take bar inventory and make every aspect of your work life more enjoyable.
For more resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com today.