How a One-Woman Juice Bar Became an International Brand

Ruth Tal, against her parents wishes, quit high school to work full-time at her then part time retail job. “Tell me I can’t, and I’ll just want to do it even more,” she says.

She spent two years working for independent fashion retailers who became ersatz mentors, teaching her more about small business than she says she ever would have learned in school. Several years later, she would repeat her decision, opting out of University at the last minute, using her student loan to start a business.

That business is Fresh, a vegetarian restaurant empire with multiple locations in Ruth’s native Toronto, three locations in Moscow, and one in Mexico City. Fresh expanded its reach with a series of namesake cookbooks, gift cards, and cold-pressed juice cleanses, sold through a complementary ecommerce store.

And it all started with one simple glass of carrot juice.

fresh ruth tal

Let’s rewind 27 years. Ruth was returning from a seven-year traveling stint, working her way through places like Israel, East Asia, and Australia while picking up skills and experiences. Back in Canada, she happened upon a small shop that was selling pressed carrot juice—her first exposure to vegetable juicing.

While waiting for the juice to be pressed, she was introduced to a community of health-minded people. The shop, ahead of the juicing trend, also stocked books on the medicinal benefits of juicing and plant-based diets. Fresh Fruit and Vegetable Juices by Norman Walker and other books like it changed her perception on food. It also gave her a cause.

“Reading these books, understanding what was happening in the meat industry and where food was coming from, it was really hard to look at food the same. So, I pretty much became vegan overnight. I got a little juicer and started making these radical combinations at home. I was feeling so amazing. Everybody was like, ‘You look so good. Why are you glowing?’”

I pretty much became vegan overnight. I got a little juicer and started making these radical combinations at home.

Committed to her vegan lifestyle, Ruth set out to share her new knowledge and sense of wellness with the world. It was 1990 and she knew that, at the time, the concepts were “out there”. Juicing was not mainstream, and even organic farming was met with skepticism, reserved for the hippies and the radicals.

“I wanted to inspire people. I wanted them to change how they were eating, and how they were approaching their choices. Also, I think, deep down, I was looking for a cause. I was looking for something to champion, and, in the 90s, there really wasn’t that much to fight for.”

Though she had eventually finished her high school diploma and was accepted to a university Political Science program that year, she couldn’t ignore the pull towards entrepreneurship—a life path that she had been unknowingly cultivating since her first retail job.

With $10,000 earmarked for tuition and books, she bought two industrial juicers. Juice for Life, as it was called at its outset, was a one-woman outfit, a traveling juice bar that would pop up at music festivals, markets, and health conferences.

“I had applied for an OSAP student loan—it was about $10,000. By then, I had a sense that I could keep going in the direction I was going, and just continue to grow. So I didn’t go to school, and I used my loan money to start Juice for Life. OSAP caught up with me a year later. They were like, ‘Hey, where’s our money?’ I cut a deal with them. I paid them back, like, $100 a week. And that was how I started my business.”

I didn’t go to school, and I used my loan money to start Juice for Life.

In 1992, the business took the leap from mobile to stationary, with a permanent stall set up in the trendy and bustling Queen West Market. Within very little time, she realized she was already outgrowing the space.

“I had two or three people working with me. I was working 80 hours a week. And I knew I was onto something. I just worked my ass off. I built a following, and I grew incrementally. I didn’t get ahead of myself. Every time I maxed out the location I was in, and I had people lined up at the door, I made my next move, and I would grow into a larger space. I would make the menu a little bit bigger, and I would develop more categories.”

I didn’t get ahead of myself. Every time I maxed out the location I was in, and I had people lined up at the door, I made my next move.

Fresh Partnerships

At this point in her journey, she realized two things: first, that her dreams of opening a full-scale restaurant were actually attainable, and secondly, she was in over her head. Thankfully, the realization coincided with an introduction to a friend of a friend, accountant Barry Alper, who would soon become her partner.

She opened her first full-service restaurant in Toronto’s Annex neighborhood, and enlisted Barry as a business advisor and he helped with managing her books, and wrangling payroll, and food costs.

“I’d been doing my own books, but they were a mess. I was trying to keep it together, but I started to realize I was in the weeds. And the only way to have a healthy and successful business is to have a strong organized back of the house. A strong, organized office. I recognized that having someone who could give me feedback and be the backbone of the business, that would be the key to my longevity.”

The only way to have a healthy and successful business is to have a strong organized back of house.

Barry helped her write a business plan as she was preparing to seek to fund. Ruth offered him a chunk of the business in exchange for being her partner. She figured that it was a risk to ask him to bank on her, but she was also reluctant to bring someone else into the business who might question her decisions. But the two developed a partnership, still going strong 20 years later.

“My industry was so early days that it was hard to explain to a mainstream person why I was making certain choices. I’d had so much resistance from everyone around me. A lot of people laughed. It took a little bit of time for me and Barry to learn how to be good partners to each other. We started off with baby steps, and then, as the business grew and as our confidence in each other grew, it’s become an amazing partnership. It’s probably the best thing I ever did.”

It’s become an amazing partnership. It’s probably the best thing I ever did.

Together, they opened the brand’s second location.

Shortly after the expansion, the business suffered a blow: two women who were running the kitchen at the original location quit and stole the recipe book. A recently-hired Jennifer Houston stepped in to take over and soon became indispensable to the restaurant.

“When I wrote my first cookbook, Jennifer helped me test the recipes, and we ended up striking this great friendship and mutual respect. Eventually, Barry and I invited her to be a third partner, as well. We didn’t ask her to invest anything because we felt like just having her sign on to be a co-owner was good enough for us.”

Jennifer completed the trifecta, and the strength of the partnership guided the business to expand to new locations, publish several cookbooks, and launch a line of cold-pressed juices.

They focused on people and retention, building a strong team that has grown up with the business. “That’s why I’m sitting in LA right now, on my porch,” she says, “and the business is running without me.”

What’s the secret to getting to this place? Sticking with it, she tells me, because success doesn’t happen overnight.

“I have no regrets. I don’t look back and wish I had done anything differently because I wouldn’t be here today. Everything that I did along the way, even the mistakes that I made, brought me to where I am today. Even in the face of doubt, even in the face of resistance from people around you, if you really believe in what you’re doing, and you have a passion for it, it’s really about sticking with it and seeing it through. To build the business that I have takes time.”

Everything that I did along the way, even the mistakes that I made, brought me to where I am today.

Vegans in a Dangerous Time

When Ruth launched a business in the 90s, it was ahead of its time, and timing ended up being a huge factor in her success. She was a pioneer in the vegetarian scene. Ramping into the millennium, plant-based diets started to catch on, and inspire a rash of new vegetarian, vegan, and juice businesses trying to catch up with the trend.

Before the surge of interest, growing her business and winning over new customers relied on a soft approach.

“The trick was, as Barry always used to say, ‘Just get it in their mouths, and then we have a customer for life.’ The approach that we had, apart from having the confidence in the food or juice that we created, was the environment. We really focused on upping our game and leveling the playing field between us and all the other great restaurants by offering service, presentation, music, and seating that was just as great as all the other restaurants in the city.”

The trick was, as Barry always used to say, ‘Just get it in their mouths.’

The team’s strategy was to build an environment that was a sanctuary for then-under-serviced vegans, but also welcoming to anyone else.

“Ultimately, they’re like, ‘Wow. That was so awesome.’ It’s an afterthought that it was plant-based. At that time, that was really important so they wouldn’t feel like they were being preached to.”

Cold Pressed Dot Com

When Fresh launched their line of cold-pressed juices, it was the first time that they were producing a product that could be sold easily offsite. Fresh ingredients and preservative-free recipes made for limited portability of their core product.

The partners moved from another platform to Shopify in 2016 to have more independence over managing their e-commerce juice sales. They added cookbooks, t-shirts, gift cards, and cleanse programs to their roster of juices sold outside of the traditional restaurant model, says Barry.

“We have a wholesale operation and we wanted customers at those locations to be able to order products from our restaurants. The website allows us to expand our reach and provide an in-home experience for our customers that is similar to our in-store experience.”

Returning to her Roots

Ruth may have disappointed her parents with what they perceived as questionable life decisions as a teen, but, she says, they eventually came around.

“When I go get my mom to take her out for lunch, I try to go to different places, but she only wants Fresh because that’s the food that she likes the most. My dad used to always carry my cookbooks in his briefcase, and he used to give them away. He’d go to the dentist, he’d give them a copy. Go to the bank, give them a copy.”

My dad used to always carry my cookbooks in his briefcase, and he used to give them away.

Now, 8 locations later, and 27 years after her one-woman-with-a-juicer beginnings, Ruth has hit the sweet spot, that entrepreneurial idea: she’s hired the best people to take over many of the aspects of the business so that she can focus on what she does best. And for her, that thing is returning to her roots, bringing her lust for juice and plant-based food to the rest of the world.

“I’ve really been the one to go out in the world and bring fresh to other cities. We opened in Mexico City last summer. We opened in Moscow, five years ago. My new passion is bringing Fresh to other communities and cities that really haven’t been exposed to what we’re doing.”

 

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Why You Need to Stop Worrying About Profit and Start Worrying About Cash Flow

Improving cash flow is a smart move for any business.

It doesn’t matter how great your business model is, how profitable you are, or how many investors you have lined up. You won’t survive if you can’t manage your company’s cash.

In fact, one study found that 82% of businesses fail due to poor cash flow management skills. If you’re looking for one area to focus on that will have a dramatic impact on your business, this is it.

Established businesses often have a buffer of extra cash to get them through shortfalls. Growing businesses often don’t because they are always reinvesting.

Years with the biggest growth—including the first few years—are also the most challenging when it comes to cash flow. This is one of the reasons it’s so hard to get a new business off the ground.

Getting good at managing cash flow is one of the best things you can do for your business. Not only that, it’s a skill you can carry over into other businesses, as well as your personal finances.

Note: We’ve put together a free template to help you manage your cash flow. Find it at the end of this blog post and keep reading to learn how to use it.

The Difference Between Cash Flow and Profitability

 

Cash flow is not the same as profitability. A profitable business can still be unable to pay its bills. Similarly, just because a business is meeting all of its financial obligations, doesn’t mean it’s profitable.

Profit is an accounting term, which really only exists on paper. Measuring profit is a very specific way of looking at a business. It doesn’t tell you a whole lot about how the business is getting by day-to-day.

Calculating Profit

Profit is typically calculated in two steps. The first is to take your total revenue and subtract the cost of the goods sold. The difference is your gross profit.

Revenue — Cost of Goods Sold = Gross Profit

For example, if you sold $100,000 in rocking chairs, and the chairs themselves cost you $50,000 wholesale, your gross profit would be $50,000.

Revenue:                    $100,000
Cost of Goods Sold   -$50,000
Gross Profit:                $50,000

Of course, you would probably have other expenses beyond buying the chairs. For example, you’d need a place to store the chairs, and you might want to run some ads to get more sales. These expenses are called operating expenses and they get subtracted from your gross profit.

Operating expenses include most costs that are not directly connected to what you’re selling. Things like rent, equipment, payroll, and marketing.

The second step of calculating profit it to subtract operating expenses from gross profit. The difference is net profit.

Revenue:                    $100,000
Cost of Goods Sold:  -$50,000
Gross Profit:                $50,000
Operating Expenses: -$35,000
Net Profit:                    $15,000

If your net profit is a positive number, you made money. If it’s a negative number, you lost money. This report as a whole is called the income statement or profit and loss (P&L).

 

 The Problem With Profit

The problem with income statements is that they don’t show your whole business. A few very important pieces of information are missing.

1. Debt Repayment

If you have any business loans or other startup capital to repay, it won’t show up here. Only the interest on those loans will be included on a P&L. Even though debt repayments can eat up a lot of cash.

2. Equipment Payments

Similarly, if you make a major equipment purchase, the entire cost will not show up here. Instead, that cost will get spread out over the lifetime of the equipment. If you spend $100,000 on a canning line and you think it will last you ten years, your income statement will show an expense of $10,000/year for ten years. Even if you had to pay all of it upfront.

3. Taxes

It’s also important to note that your net profit hasn’t been taxed yet. This means it’s going to shrink even more. Even if all of your profit is available in cash, you won’t be able to run out and spend it all in one place.

4. Cash Received

Finally, many businesses use accrual accounting, which records revenue even if you haven’t received the money yet. On paper, you might have $200,000 in sales but if nobody has paid you yet, you’re still going to have a hard time paying the bills.

Further, if you carry inventory, all that product has value and gets included on your income statement as well. Of course, in order to extract cash from your inventory, you need to sell it first.

You can start to imagine why profit has little bearing on cash flow.

 It’s All About Timing

Ultimately, cash flow comes down to timing. You may be profitable over the course of a month or year, but not a specific day or week. If your bills are due at the beginning of the month but you won’t have any money in the bank until the end of the month, you’ve got a cash flow problem. Even if at the end of the month, you made more than you spent.

Here’s the deal with profit. If you’re not profitable on paper, you’re in bad shape. You need to either increase your revenue or decrease your expenses if you want to stay in business.

But just because you’re profitable, doesn’t mean your business can run on autopilot. You still need to watch your cash—especially if you’re growing.

Benefits of Cash Flow Management

 

Although it may seem intimidating, there are clear benefits to prioritizing effective cash flow management.

1. Predict Shortfalls

The first and most obvious benefit to managing cash is knowing ahead of time when you’re going to have shortfalls. Don’t find out you can’t make rent after the check bounces. With a good system in place, you can predict shortfalls weeks, and sometimes even months ahead of time. This will give you time to come up with a plan. For example:

  • Call your landlord and ask them to cash your check a couple days later
  • Delay a shipment by a couple weeks to put off paying duty at customs
  • Run a promotion too quickly drive additional sales
  • Go on a collection to spree to clear up outstanding bills

2. Reduce Stress

Believe it or not, obsessing over cash flow will alleviate a lot of stress. Much of the anxiety entrepreneurs experience around paying bills comes from not knowing what’s going on, and worrying about whether or not it will work out.

It’s much better to know what’s coming, even if the outlook is not good. When you actually know where you stand, you’ll feel prepared. More importantly, you’ll be equipped to deal with it.

3. Know When to Grow

When you’re keeping an eye on cash flow, you know exactly how much money you have to spend on growth. Remember, just because your P&L tells you there’s extra money lying around, doesn’t mean it will materialize in real life.

Similarly, just because you have $20,000 in the bank, doesn’t mean you can spend it. You might need it to pay for upcoming expenses. When you look at your cash flow over the course of weeks and months, you’ll know how much have on hand to squirrel away or spend on growth.

4. Gain Leverage

Good cash flow management gives you leverage. If you need a line of credit from the bank to get you through a shortfall, or you want to get a supplier to give you a break for a couple weeks without interrupting service, a good cash flow system will back you up and establish trust.

Banks generally like to see this kind of planning, especially if you can clearly show when you’ll be able to repay the funds. Suppliers are much more likely to be flexible if you can tell them exactly how you’ll pay and when, rather than dropping off the face of the earth like most businesses do during tough periods. These people want your business and will be more willing to work with you through the ups and downs if they can trust you.

5. More Accurate

Cash flow is significantly more accurate than a budget. Budgets tell you what you want to happen. They’re wishful thinking and entrepreneurs are optimistic by nature. Cash flow projections tell you what is actually happening so you can deal with it—even if it’s not what you planned at the beginning of the year.

Most of us (myself included) would often rather not think about cash flow and just hope it works out. But it’s not worth the risk. You really will feel better staying on top of it.

How to Forecast and Manage Cash Flow

 

There are a number of paid tools out there to help you manage cash flow. Personally, I think the free one is the best one: Google Sheets. Anyone can use a Google spreadsheet to organize their cash. Although, it’s a manual process, it doesn’t take long to set up, and it’s easy to stay on top of.

More importantly, it’s easy to customize on the fly and adapt to your specific needs or situation. You can be as broad or specific as you want. And the time you spend creating and updating your spreadsheet is valuable for gaining a clearer picture of your situation.

The cash flow spreadsheet is basically an outline of where your cash is going. It shows you when cash will be coming in, and when it be going out. It’s a great way to quickly visualize and adjust.

Most businesses work best by planning week-to-week. However, some may need daily, others only need monthly. It’s also up to you if you want to include every single expense or just categories of expenses. These decisions will depend on the scale and complexity of your business.

Similarly, some businesses will be able to project their cash flow accurately for six months, others only two weeks. In general, try to project four to six weeks reasonably accurately. A good rule of thumb is that the farther you are into the future, the less accurate your predictions will be.

 Step 1 – Forecast Expenses

The first step is to lay out all your ongoing financial obligations. Start by making a list of all the things you have to pay, from rent, to salary, to advertisements, to software fees, to loan repayments. Anything that comes out of your bottom line. Write down what the expense is for, how much it is, and when it’s due. You’ll likely forget about a few things so go through your bank and credit card statements to see what else you come up with.

Step 2 – Forecast Revenue

Next, it’s time to forecast your weekly revenue. Many businesses experience fluctuations in sales so it can be a bit of an art. Try to be as accurate as possible. The more established your business becomes, the easier it will be.

Start by writing down any guaranteed revenue. If you sell subscriptions or have long-term contracts, you’ll have a good idea of what’s coming up. You can estimate if those numbers are going to go up, down, or stay the same.

If a large portion of your sales are from first-time customers, it will be more difficult to estimate. Still, you should have a good idea of what to expect over the coming weeks and months. The closer you can get to reality the better.

One thing that can really help with projections is to look at past data. In many cases, your sales from this week a year ago will be more accurate than your sales last week. This is because historical data takes annual cycles and seasonality into account. If you believe your sales will grow over last year’s, you can increase the amount, but it’s important to be conservative so you don’t end up in a sticky situation.

As you forecast revenue each week, be mindful any dips in sales due to holidays, the time of month or year, as well as any promotions or major deals that will impact your revenue.

Step 3 – Plug in Your Data

Now comes the fun part. It’s time to fill in your data. First, grab your free copy of the cash flow projection template. Use it customize a row for each expense and each revenue source. You can be as detailed or broad you need to be.

 

If you sell a bunch of products on one website, you may only have one source of revenue. If you use multiple channels such as web, retail, and trade shows, you might want to have a line for each because it will be easier to predict.

Make sure you add revenue to the week it will become available to you. Keep in mind, it may take a few days to end up in your bank account.

Similarly, fill in your expenses. Some will be weekly, some bi-weekly, some monthly, some variable. You’re also going to have a lot of miscellaneous expenses popping up. Use the row labeled “Other” to work these into the spreadsheet.

Add your opening bank balance for the first week. The following weeks will be predicted automatically based on your revenue and expense projections.

Step 4 – Update Your Spreadsheet

Your cash flow spreadsheet is a living document. If you keep it as a Google Sheet, it will be available anytime, anywhere. You’ll also be able to easily share it with someone else such as your accountant or another employee.

A good cash flow spreadsheet is updated on a regular basis. Once a week, log in and update your closing bank balance. If it doesn’t match up to what was previously calculated, it’s a good idea to figure out why. Sometimes expenses you forgot about pop up, or you realize you may have been too optimistic in your revenue projections.

Next, hide last week’s column. You won’t need it anymore since it’s in the past.

Finally, add a new week of projections in the last column. You always want to have a minimum of four to six weeks laid out so you can plan ahead.

Any time you’re projecting a shortfall, the closing bank balance will alert you by turning red. This will give you an opportunity to make some changes. In the template provided, you can see that a shortfall is predicted in the third week.

 

By knowing this ahead of time, this company could contact their product supplier and renegotiate their next payment. Instead of paying all $5,000 that week, they could ask to pay $3,000, and settle the remaining $2,000 the following week.

Free Business Cash Flow Projection Template

If you haven’t already, don’t forget to grab your free cash flow template. Simply click on the this link and you’ll be taken to the document in Google Drive. Click on “File” → “Make a copy…” to save your own editable version of the spreadsheet. You need to be logged into your Google account to make a copy.

 

Most companies simply can’t survive without good cash flow management. But anyone can do it. Take the time to get organized now and it’ll be easy to stay on top of it.

How do you track your cash? I’d love to hear about it in the comments!

Warning: You’re Losing Money By Not Using These 8 Inventory Management Techniques

I used to dread the word “inventory”. As a part-time cashier in high school, the word inventory only meant one thing: lots and lots of counting. It’s common for businesses to reconcile their inventory at the end of the year by counting up all their physical product and making sure it matches what’s on the books. For big companies like the one I used to work for, this requires everyone’s help.

These days, I understand just how important solid inventory management is. Inventory is a placeholder for money. You paid money for it, and you’ll get that money back (and then some) when you sell it.

Why Inventory Management Is Important

Holding inventory ties up a lot of cash. That’s why good inventory management is crucial for growing a company. Just like cash flow, it can make or break your business.

Inventory Management Saves You Money

Good inventory management saves you money in a few critical ways:

Avoid Spoilage

If you’re selling a product that has an expiry date (like food or makeup), there’s a very real chance it will go bad if you don’t sell it in time. Solid inventory management helps you avoid unnecessary spoilage.

Avoid Dead Stock

Dead stock is stock that can no longer be sold, but not necessarily because it expired. It could have gone out of season, out of style, or otherwise become irrelevant. By managing your inventory better, you can avoid dead stock.

Save on Storage Costs

Warehousing is often a variable cost, meaning it fluctuates based on how much product you’re storing. When you store too much product at once or end up with a product that’s difficult to sell, your storage costs will go up. Avoiding this will save you money.

Inventory Management Improves Cash Flow

Not only does good inventory management save you money, it also improves cash flow in other ways. Remember, inventory is product that you’ve likely already paid for with cash (checks and electronic transfers count as cash too), and you’re going to sell it for cash, but while it’s sitting in your warehouse it is definitively not cash. Just try paying your landlord with 500 iPhone cases.

This is why it’s important to factor inventory into your cash flow management. It affects both sales (by dictating how much you can sell), and expenses (by dictating what you have to buy). Both of these things factor heavily into how much cash you have on hand. Better inventory management leads to better cash flow management.

When you have a solid inventory system, you’ll know exactly how much product you have, and based on sales, you can project when you’ll run out and make sure you replace it on time. Not only does this make sure you don’t lose sales (critical for cash flow), but it also helps you plan ahead for buying more so you can ensure you have enough cash set aside.

Money spent on inventory is money that is not spent on growth. Manage it wisely.

8 Inventory Management Techniques

Inventory management is a highly customizable part of doing business. The optimal system is different for each company. However, every business should strive to remove human error from inventory management as much as possible. This means taking of advantage inventory management software.

Regardless of the system you use, the following eight techniques to will help you improve your inventory management—and cash flow.

1. Set Par Levels

Make inventory management easier by setting “par levels” for each of your products. Par levels are the minimum amount of product that must be on hand at all times. When your inventory stock dips below the predetermined levels, you know it’s time to order more.

Ideally, you’ll typically order the minimum quantity that will get you back on par. Par levels will vary by product based on how quickly the item sells, and how long it takes to get back in stock.

Although it requires some research and decision-making up front, setting par levels will systemize the process of ordering. Not only will it make it easier for you to make decisions quickly, it will allow your staff to make decisions on your behalf.

Remember that conditions change over time. Check on par levels a few times throughout the year to confirm they still make sense. If something changes in the meantime, don’t be afraid to adjust your par levels up or down.

2. First-In-First-Out (FIFO)

“First-in, first-out” is an important principle of inventory management. It means that your oldest stock (first-in) gets sold first (first-out), not your newest stock. This is particularly important for perishable products so you don’t end up with unsellable spoilage.

It’s also a good idea to practice FIFO for non-perishable products. If the same boxes are always sitting at the back, they’re more likely to get worn out. Plus, packaging design and features often change over time. You don’t want to end up with something obsolete that you can’t sell.

In order to manage a FIFO system, you’ll need an organized warehouse. This typically means adding new products from the back, or otherwise making sure old product stays at the front. If you’re working with a warehousing and fulfillment company they probably do this already, but it’s a good idea to call them to confirm.

3. Manage Relationships

Part of successful inventory management is being able to adapt quickly. Whether you need to return a slow selling item to make room for a new product, restock a fast seller very quickly, troubleshoot manufacturing issues, or temporarily expand your storage space, it’s important to have a good relationship with your suppliers. That way they’ll be more willing to work with you to solve problems.

In particular, having a good relationship with your product suppliers goes a long way. Minimum order quantities are often negotiable. Don’t be afraid to ask for a lower minimum so you don’t have to carry as much inventory.

A good relationship isn’t just about being friendly. It’s about good communication. Let your supplier know when you’re expecting an increase in sales so they can adjust production. Have them let you know when a product is running behind schedule so you can pause promotions or look for a temporary substitute.

4. Contingency Planning

A lot of issues can pop up related to inventory management. These types of problems can cripple unprepared businesses. For example:

  • your sales spike unexpectedly and you oversell your stock
  • you run into a cash flow shortfall and can’t pay for product you desperately need
  • your warehouse doesn’t have enough room to accommodate your seasonal spike in sales
  • a miscalculation in inventory means you have less product than you thought
  • a slow moving product takes up all your storage space
  • your manufacturer runs out of your product and you have orders to fill
  • your manufacturer discontinues your product without warning

It’s not a matter of if problems arise, but when. Figure out where your risks areand prepare a contingency plan. How will you react? What steps will you take to solve the problem? How will this impact other parts of your business? Remember that solid relationships go a long way here.

5. Regular Auditing

Regular reconciliation is vital. In most cases, you’ll be relying on software and reports from your warehouse to know how much product you have stock. However, it’s important to make sure that the facts matche up. There are several methods for doing this.

Physical Inventory

A physical inventory is the practice is counting all your inventory at once. Many businesses do this at their year-end because it ties in with accounting and filing income tax. Although physical inventories are typically only done once a year, it can be incredibly disruptive to the business, and believe me, it’s tedious. If you do find a discrepancy, it can be difficult to pinpoint the issue when you’re looking back at an entire year.

Spot Checking

If you do a full physical inventory at the end of the year and you often run into problems, or you have a lot of products, you may want to start spot checking throughout the year. This simply means choosing a product, counting it, and comparing the number to what it’s supposed to be. This isn’t done on a schedule and is supplemental to physical inventory. In particular, you may want to spot check problematic or fast-moving products.

Cycle Counting

Instead of doing a full physical inventory, some businesses use cycle counting to audit their inventory. Rather than a full count at year-end, cycle counting spreads reconciliation throughout the year. Each day, week, or month a different product is checked on a rotating schedule. There are different methods of determining which items to count when, but, generally speaking, items of higher value will be counted more frequently.

6. Prioritize With ABC

Some products need more attention than others. Use an ABC analysis to prioritize your inventory management. Separate out products that require a lot of attention from those that don’t. Do this by going through your product list and adding each product to one of three categories:

A – high-value products with a low frequency of sales
B – moderate value products with a moderate frequency of sales
C – low-value products with a high frequency of sales

Items in category A require regular attention because their financial impact is significant but sales are unpredictable. Items in category C require less oversight because they have a smaller financial impact and they’re constantly turning over. Items in category B fall somewhere in-between.

7. Accurate Forecasting

A huge part of good inventory management comes down to accurately predicting demand. Make no mistake, this is incredibly hard to do. There are so many variables involved and you’ll never know for sure exactly what’s coming—but you can get close. Here are a few things to look at when projecting your future sales:

  • trends in the market
  • last year’s sales during the same week
  • this year’s growth rate
  • guaranteed sales from contracts and subscriptions
  • seasonality and the overall economy
  • upcoming promotions
  • planned ad spend

If there’s something else that will help you create a more accurate forecast, be sure to include it.

8. Consider Dropshipping

Dropshipping is really the ideal scenario from an inventory management perspective. Instead of having to carry inventory and ship products yourself—whether internally or through third-party logistics—the manufacturer or wholesaler takes care of it for you. Basically, you completely remove inventory management from your business.

Many wholesalers and manufacturers advertise dropshipping as a service, but even if your supplier doesn’t, it may still be an option. Don’t be afraid to ask. Although products often cost more this way than they do in bulk orders, you don’t have to worry about expenses related to holding inventory, storage, and fulfillment.

It’s time to take control of your inventory management and stop losing money. Choose the right inventory management techniques for your business, and start implementing them today.

8 Small Business Accounting Tools to Help You Manage Your Finances

8 Small Business Accounting Tools to Help You Manage Your Finances

Accounting can be a time-consuming chore for small business owners, but a necessary one in order to track, manage, and optimize your business’ growth over time.

Sooner or later (and the sooner, the better), you’ll need to invest in a small business accounting software and system to manage your cash flow and prepare for tax time.

From bookkeeping to invoicing to tracking expenses, there are a lot of different things to consider when choosing the right software for your needs.

That’s why we’ve put together this list of popular small business accounting tools and Shopify apps to help you pick the right accounting system for you.

Brush up on the accounting basics with Small Business Accounting 101: Ten Steps to Get Your Startup On the Right Track.

Choosing Accounting Software For Your Small Business

1. Quickbooks Online

quickbooks accounting tool

Intuit Quickbooks Online is considered the standard when it comes to small business accounting and bookkeeping software, offering many of the features and bookkeeping functionality most types of businesses need with the added benefit that your accountant is probably already familiar with it.

Quickbooks makes it easy to select and pay for the features you need for your specific purposes, from:

  • Invoicing
  • Payroll
  • Managing bills from vendors and suppliers.
  • Expense tracking (including the ability to snap and save receipts through the app)
  • Inventory tracking

By connecting your bank account to Quickbooks Online, your account activity gets downloaded and categorized in Quickbooks, saving you the time it would take to reconcile and compare your records with your actual account activity.

You can take Quickbooks online for a test drive with a mock business to see it in action.

Price: $15 to $40 per month

2. Freshbooks

accounting tools freshbooks

Freshbooks is a popular invoicing solution with built-in expense management and time-tracking features, as well as the ability to accept payments from clients.

Naturally, this makes it great for freelancers, agencies, and other service-based businesses with the ability to automate late payment reminders to customers, manage your different clients and projects with pricing that’s based on the number of active clients you have at a time.

Freshbooks is known for being user-friendly and providing stellar customer support when you need it, and is an easy choice if you sell services rather than products.

Price: $15 to $50 per month

3. Xero

accounting tools xero

Xero offers a wide breadth of accounting tools that include everything from bookkeeping to paperless expense management and the ability to get paid in over 160 currencies with automatic conversions and exchange rates updated hourly.

Xero lets you send invoices and quotes, as well as automatically reconcile your accounts, as you’d expect from a good accounting software. But the availability of inventory tracking and the ability to make purchase orders to your supplier on affordable plans makes it a good option if you are selling products online or offline.

Xero also offers you a directory of “Xero Champions” to work with—accountants and bookkeepers that specialize in different industries from retail to wholesale to professional services and more.

Price: $9 to $70 per month

4. Zoho Books

zoho books accounting tool

Zoho Books is part of the Zoho collection of business software that also includes a CRM, help desk and, in this case, bookkeeping applications. So if you are already using or plan to use other Zoho tools, particularly their CRM, it might make sense to use their business finance software too.

You get most of the features you’d come to expect from a bookkeeping software, plus time-tracking and other features that are perfect for selling services and not just products.

Price: $9 to $29 per month

5. Connector Apps

Getting your various software solutions to “speak” to one another can save you a lot of time and help you automate the transfer of data from one application to another or from you to one of your business partners.

That’s where “connectors” or integration apps come in.

The following connector apps let you seamlessly export product, payment, tax, and customer data with a single click, saving you from the monotony of manual data entry.

There are connector apps for:

Integration cloud solutions like Zapier offer a good alternative if you’re stumped to find a way to connect your different software or automatically update data in your spreadsheets.

Plus, you can also use the service to automate other workflows across your business.

6. SimplyCost

Without accounting for the cost of goods sold (COGS), you won’t be able to track the real profit you net from each sale or the true value of your inventory.

SimplyCost is a simple and affordable Shopify app that lets you generate profit-based reports based on cost of goods sold.

You can set the cost of your goods for specific variants and even time frames within your sales history to paint an accurate picture of your actual profit.

Price: $4.99 per month

7. Profiteer

Profiteer is another Shopify app that can help track COGS of your products and variants. It doesn’t integrate with accounting software directly but you can export a CSV report that shows the total cost of your inventory or even profits within a certain time frame.

You can even apply your cost pricing to your previous sales history.

It accounts for currency fluctuations as well, so that you have an accurate idea of your true profit at any given time if you don’t sell in USD.

Price: $15 to $30 per month

8. Xporter Data Export Tool

Xporter isn’t an accounting tool specifically, but it is a great way to create almost any kind of report you want by exporting your store’s data into an Excel file. It can also give you data and fields that you wouldn’t have access to in your store by default.

You can automate these reports to be emailed to yourself, your supplier, your accountant or anyone else who’s involved with your business on an ongoing basis.

In the words of one user:

“This app helps me generate reports any which way that I like. By date, country, fulfilled or not, product, and so much more. It is 100% customizable. I can use the Excel file (or CSV) to send to my supplier, or use reports for my own benefit.”

Price: $7 to $45 per month

Find an Accounting System That Works For You

Factors ranging from the size of your business, your industry, your employees, whether you sell products or services or both, among others, are important to consider when choosing an accounting system that works for your business and your budget.

If you don’t need all the extra features, such as payroll management, then you can choose a simpler solution that gets the job done. On the flip side, you might also want to consider software that’s able to scale with your business as you plan for growth.

As always, when investing in any software as part of your business’ technology ecosystem, it’s important to do your due diligence and know exactly what you’re paying for.