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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. PROFITS PLUS, FOUNDER OF...
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FEBRUARY 2025
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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
Hopefully there are few small businesses that are operating with handwritten documents. Whether you have a point of sale (POS) system; Curstomer relationship management (CRM) system; or anything digital that helps you better operate your business, there remains a question.
Are you using everything that you bought? That is the focus of the February Small Business Advisory.
Small Business
As small business ownerss we are sure to disagree on many aspects of business management and ownership. However there are two items that I will always insist on.
The first item for you as manager and owner of a business, you must inderstand financial information. You cannot leave it to an accountant. The second item is you have to invest in educating your staff regarding their responsibilities within your business.
Most every small business has inventory. It may be inventory used as a part of your services. It may be inventory for items used in your business. The article of the month shares ideas of how you should control the inventory. This is important because you do not want to run out of the necessary inventory, and you do not want too much of your money sitting in more inventory than you need.
You cannot beat your competition unless you know what they are doing. The February book of the month is, The Everything Store, written by Brad Stone and Jeff Bezos.
