When do you make your financial decisions in business?

[Bronze_Palms]

Curious how other business owners make their financial decisions in business.

I am in the process of doing another inventory order for my cosmetics line. I typically try to complete these orders during our busier season so the cash loss doesn't hurt as bad as it would during our slower season. In the slower season, it can be hard for me to plan to limit our liquidity in this way.

I've also been overly confident during our busy season and made financial decisions that I otherwise wouldn't during our slower season.

When do you make your financial decisions in business?

[Minion]

For the most part, I am steady all year round, nothing insane but enough to manage with a simple weekly order. Toward the end of July however, I actually really bulk up my ordering on 3+ 55 gallon drums at a time, and another 3 of a different material.  Getting ready for this current time of year between customers, school busses and fire departments.

[CareyJo]

I definitely think it varies by industry, predicted sales and sales history.  We only order as needed, whether it's to stock inventory or to order per job.  However, our stock means only 2 or 3 of something on a shelf and only about 20 different items in total.  It may take us a year or more to sell through all of those items.  We began our business with a certain volume and then I replenish it only as it sells.  That's what's easiest for us.

I know that makeup has a shelf life and parts don't, but I would venture to think you could do the same thing, if you're at a point where your current inventory is solid.  But I also don't know your ordering restrictions - do you have minimums from suppliers?  Does it pay to order in larger bulk to save money?  Etc...  I would recommend weighing your options on paper, to see when the best time is to purchase and what the best volume is.  We're empty nesters now, so even though it would save me money to buy in bulk, I don't.  I'd rather pay a little more to get fewer items that won't spoil than to throw away a ton of food.  Sometimes purchasing in quantity isn't always the best option.

I've done inventory for several different companies, not just our own.  I would always look at what your predicted sales will be for each season (based on sales history) and then order the lowest amount possible to have a full shelf.  If you don't have to meet minimums, you can order as needed to restock the shelf.  Our filters are a great example.  I make an inventory each month before I place an order, so that I know what we have on hand.  Then I look at the upcoming two months to see how many and what sizes, we will be using for those months.  Then, I'm able to create an order for only the missing filters.  This way, I never have a huge overstock, I'm not overspending and I'm ordering before the need to have them on hand is here.  I have no idea what suppliers you use, but I would also look at whether or not you can make a change that better suits your business so that you're not financially strapping yourself to get what you need.  The other thing I would do is a budget review, if you haven't already.  It sounds like you already know what that is, but can you shift some things to allow for those purchases and purchase other items at a different time?  I think that a lot of people/owners look at their budget either as too large or too small, in scope.  They often can't look at the whole year at once and know when they will need to plan to purchase and what the volume would be, then they are caught off guard.  I know that with our largest contract, that the volume is heavy in February, May, August and November so I can plan accordingly.  I can look at our history and see what we used during those months to be better prepared.  I also then compare my purchasing deadlines with incoming deposits.  I can't count my chickens before they're hatched, but I can look at the schedule and see what jobs are up and estimate when we will get paid to know what should be coming in and when.  This gives me the leverage I need to push one thing out if I don't need it right away, to cover one thing I do.

Hope this helps!