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Inventory needed per square foot calculator One of the tough questions a business always faces is that of how much inventory is needed. While the answer is found by answering the question of how much sales you want to produce, there actuall is a calculation you can make that will help you with determining the exact dollar amount. Begin this exercise by entering the width and length of the square footage the inventory is going to occupy. This could be a display area or the entire store. The height of the display is not a necessary component of this calculation. The total square footage will then appear in the third line of data. The next component of information needed is your desired sales per square foot. This is expressed as a dollar amount. The next row will give you a calculation of the amount of sales for the area you are calculating. The third section is where you enter your anticipated, or desired annual turn rate. Doing so will give you a dollar amount of inventory, at retail, needed for this space . When you enter your gross margin, the last row will calculate for you the amount of inventory at cost. This calculation helps so that you have enough inventory to produce the results you desire, but not have so much inventory that there are dollars sitting on the sales floor that are not productive. |
MAY 2024
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With over 25 years of frontline experience Tom Shay is America's leading Small Business Management Expert. He's a "Must Have" for your next event.
Small Business
The May Small Business Advisory is titled "Planning for a successful accountant" and is appropriate for many with the April 15 tax deadline having passed.
Did you work with your accountant? Or, did you just give them a bunch of papers and wait to receive a completed tax return?
Successfully working with an accountant requires a partnership. This month's Small Business Advisory gives suggestions of how to make this happen in 2024.
Small Business
We see that many small business owners have too much of a focus on the "top line" of their income statement.
Increasing revenue is great, but it is not a cure all for any challenges your business is facing. And sometimes, incresing revenue can create a challenge.
Who is your customer? Some small businesses have no focus. Their customer is whoever calls or walks in the door.
And some small businesses have determined which customers, in sufficient numbers, they should spend their efforts to attract.
The article of the month shares an old Southern rhyming couplet about business; "The bertter you niche, the more you get rich."
Lean Startup by Eric Reis is our suggested book for May.
As the title suggests, the reader of the book would be someone that is starting their business. However, we see more value than just that.
Perhaps you have been in business for many years. We think this book could give insight to items, and methods, that a small business owner should think about with their business today.
