Most businesses lose money on stock. In big companies such as supermarkets it’s called shrinkage and these businesses recover those losses via their price increases.

 In hair and beauty salons it’s called LOST PROFIT which you WILL NEVER recover just by increasing your prices.

The GOOD NEWS is losing money on stock is totally avoidable but can only be controlled if you know how much stock you need to run your business. That requires both a STRONG discipline and a GOOD stock control system.  Control means you have to  

TAKE STOCK REGULARLY

 Consider the following ESSENTIAL strategies to avoid losing money on stock:

1. Keep your cost prices updated by checking the price on your invoices every time you receive new stock.
2. Keep the RSP’s (recommended selling prices) updated every time suppliers increase their prices.
3. TAKE STOCK REGULARLY, Take Stock Regularly, take stock regularly – (GET THE MESSAGE!).
4. Calculate MODEL LEVELS and RE-ORDER LEVELS on EVERY item of stock you use.
5. Check any discrepancies after every stock take (if there are any).
6. Use the STOCK BIN to control ‘per millimetre usage’ and to transfer retail products to salon use.
7. Before placing orders, CHECK suggested re-order quantities in you STOCK MOVEMENT REPORT (if you’re not selling it, you shouldn’t need to reorder it!).
8. Get into the habit of regularly checking your FORWARD COVER report. i.e. based on your current stock on hand, how much forward cover do you have based on the sales or use-up-rate of each item you stock.
9. Check your profit & loss via your income statement to see exactly how much stock  you are spending for the amount of turnover you are generating.
10. Check out the intelligent stock-control-system on My Salon Software.

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