Module 14

Inventory, cash and the year plan

12 lessons, 57 stepsOne instruction at a time, each with the result to expect. Tick steps as you go; Helix remembers.

Outcome: the right stock at the right time, and a cash plan you trust. Plus a plan for the year that ties sales, stock and marketing together.

Related SOP: 17 Inventory and cash planning

In plain words

Stage: Grow (keep more of every sale, then scale). Every lesson below is tagged with its stage; see Attract, Convert, Grow.

What it is: How to keep the right amount of stock and enough cash in the bank.

Why it matters: Running out of stock stops sales. Too much stock ties up cash you need for ads.

Do this:

  1. Check how many weeks of stock you have for your best sellers.
  2. Order before you drop below your safe level.
  3. Keep a simple 13-week cash forecast and update it weekly.

Words to know:

  • Weeks of cover: How many weeks your stock will last at the current sales speed.
  • Cash forecast: A week-by-week list of money coming in and going out, so you can see tight weeks early.

All words are explained in the glossary.

Lesson 14.1: Range planningGrow

In short

Your range is the set of products you sell.

Do this now

Step 1: Choose the categories that earn the most and fit your brand.

Why this matters

Your range is the set of products you sell. Planning it on purpose puts your cash into styles that earn, and lets you test new ideas small before committing.

Step 1 of 50 of 5 done

Choose the categories that earn the most and fit your brand. Use last year's sales and margin by category.

Expected result

You have a short list of focus categories.

Tips

Margin
The share of each sale you keep after product cost. A $100 sale with $40 product cost is a 60% margin.

Lesson 14.2: A 10-minute weekly stock checkGrow

In short

A weekly stock check takes ten minutes.

Do this now

Step 1: Open Suppliers & stock in Helix and update on-hand and on-order counts for each product.

Why this matters

A weekly stock check takes ten minutes. It stops two costly mistakes: selling out of a best seller, and sitting on stock that will not sell. SOP 17 has the full steps.

Step 1 of 40 of 4 done

Open Suppliers & stock in Helix and update on-hand and on-order counts for each product.

Expected result

Counts are current for this week.

Tips

Lesson 14.3: Five cash leversGrow

In short

Stock ties up cash, and cash is what lets you grow.

Do this now

Step 1: Read the five levers in the table below and pick the one easiest to pull this month.

Why this matters

Stock ties up cash, and cash is what lets you grow. Five levers free it up: buy cheaper, get better terms, pay later, lower the risk and sell faster.

Step 1 of 20 of 2 done

Read the five levers in the table below and pick the one easiest to pull this month.

Expected result

You have one lever chosen.

Good to know

Lever Examples
Get it cheaper Better prices on bigger orders, other suppliers, cheaper freight (sea instead of air), packaging changes
Get better terms from suppliers Smaller deposits, production in stages, more time to pay, consignment (pay only when it sells)
Pay for it later Trade finance, supplier credit, inventory loans. Always compare the true cost.
Lower the risk Smaller first orders, preorders, extra safety stock only for A items
Sell it faster Promote products with too much cover, bundles, free gifts, planned clearance (Lesson 14.10)

Lesson 14.4: Cash flow forecastGrow

In short

A cash flow forecast shows how much cash you will have each week.

Do this now

Step 1: Make a spreadsheet with one column per week for the next 13 weeks.

Why this matters

A cash flow forecast shows how much cash you will have each week. Profit is not the same as cash in the bank. Stock deposits can drain the account months before the sales arrive.

Step 1 of 40 of 4 done

Make a spreadsheet with one column per week for the next 13 weeks. Add monthly columns beyond that for big stock buys.

Expected result

You have a blank forecast.

Lesson 14.5: Should you borrow? Weighing up a loanGrow

In short

Debt can speed up growth or sink a store.

Do this now

Step 1: Check the money will clearly earn more than it costs.

Why this matters

Debt can speed up growth or sink a store. Borrow only when both tests below are true.

Step 1 of 20 of 2 done

Check the money will clearly earn more than it costs. For example: stock for a product that already sells well, or extra stock for the busy season.

Expected result

You can name the return the money will make.

Lesson 14.6: Money mindset and finance helpGrow

In short

Good money habits make the numbers easy to see and the business easy to run.

Do this now

Step 1: If you do not have one, open a separate business bank account.

Why this matters

Good money habits make the numbers easy to see and the business easy to run. Four habits cover most of it.

Step 1 of 40 of 4 done

If you do not have one, open a separate business bank account. Move all business money in and out through it.

Expected result

Personal and business money never mix.

Lesson 14.7: The year planGrow

In short

The year plan ties sales, stock and marketing together.

Do this now

Step 1: Find your growth rate.

Why this matters

The year plan ties sales, stock and marketing together. Working backwards from monthly targets tells you what to buy and spend, and when.

Step 1 of 40 of 4 done

Find your growth rate. Compare the last 12 months of sales with the 12 months before (Dashboard, Year view).

Expected result

You have a growth percentage.

Tips

Lesson 14.8: Finding and vetting suppliersGrow

In short

A good supplier makes a good product on time at a fair price.

Do this now

Step 1: Write a one-page spec: materials, size, finish, packaging, certifications and your target landed cost .

Why this matters

A good supplier makes a good product on time at a fair price. They also tell you early when something goes wrong. Changing supplier mid-season is slow and risky, so vet carefully up front. Helix keeps suppliers, minimums, lead times and terms on the Suppliers & stock page.

Step 1 of 90 of 9 done

Write a one-page spec: materials, size, finish, packaging, certifications and your target landed cost.

Expected result

Every supplier can quote against the same spec.

Tips

Landed cost
What one unit really costs once it reaches your warehouse: product, freight, duties and fees.

Lesson 14.9: Reorder points, lead times and stock-outsGrow

In short

Running out of a best seller loses sales and pauses your ads.

Do this now

Step 1: Work out sales speed: average units a day over the last 4 to 8 weeks.

Why this matters

Running out of a best seller loses sales and pauses your ads. Ordering too much ties up cash. A reorder point tells you exactly when to order, and Helix does the maths for every product.

Step 1 of 60 of 6 done

Work out sales speed: average units a day over the last 4 to 8 weeks. Leave out days you were sold out and big sale days.

Expected result

You have units per day for each product.

Good to know

Example: you sell 2 shirts a day, lead time is 50 days and you keep 14 safety days. The reorder point is 2 x 64 = 128 shirts. With 140 on hand and none on order, you have about 6 days before you must order.

Lesson 14.10: Clear slow stock without cheapening your brandGrow

In short

Stock that does not sell is cash stuck on a shelf.

Do this now

Step 1: List products with more than 6 months of stock at current sales speed.

Why this matters

Stock that does not sell is cash stuck on a shelf. It also costs money to store. Clearing it in a planned way turns it back into cash, without training everyone to wait for discounts.

Step 1 of 60 of 6 done

List products with more than 6 months of stock at current sales speed. Helix shows weeks of cover on the stock plan.

Expected result

A list of slow products and how much cash is tied up in each.

Tips

Weeks of cover
How many weeks your stock will last at the current sales speed.

Lesson 14.11: Sold out? Pre-orders and back-in-stock listsConvert

In short

A sold-out page with no next step loses the sale forever.

Do this now

Step 1: Install a back-in-stock app, or use the one in your email tool.

Why this matters

A sold-out page with no next step loses the sale forever. A back-in-stock alert or a pre-order keeps the shopper. It also tells you how much to order next.

Step 1 of 50 of 5 done

Install a back-in-stock app, or use the one in your email tool. Turn on a "Notify me" button for sold-out products.

Expected result

Sold-out pages show a "Notify me" button instead of a dead end.

Lesson 14.12: Count the days your cash is stuckGrow

In short

From the day you pay a supplier to the day a customer's money reaches your bank, your cash is stuck.

Do this now

Step 1: Find how many days your stock sits before it sells.

Why this matters

From the day you pay a supplier to the day a customer's money reaches your bank, your cash is stuck. The longer it is stuck, the more cash you need to grow. One simple number shows you how long, and what to fix first.

Step 1 of 60 of 6 done

Find how many days your stock sits before it sells. In Shopify, open Analytics > Reports > Inventory remaining per product and read the Days of inventory remaining column (on plans that include reports). Or divide the cost of all the stock you hold by the cost of the stock you sell in an average day. For example, $27,000 of stock ÷ $300 sold per day = 90 days.

Expected result

One number: days stock sits (for example 90).

Self-check

  1. Name the five cash levers.
  2. When is borrowing reasonable?
  3. A product sells 3 a day, with a 40-day lead time and 14 safety days. What is its reorder point?
Answers
  1. Get it cheaper, get better supplier terms, pay later, lower the risk, sell faster.
  2. When the money clearly earns more than it costs and you could make repayments in a bad month. Usually for stock that already sells well.
  3. 3 × (40 + 14) = 162 units.

Words to know in this module

Cash forecast
A week-by-week list of money coming in and going out, so you can see tight weeks early.
Weeks of cover
How many weeks your stock will last at the current sales speed.
Margin
The share of each sale you keep after product cost. A $100 sale with $40 product cost is a 60% margin.
Safety stock
Extra stock (or days of stock) you keep in case sales jump or a shipment is late.
Flow
An email or text series that sends by itself when something happens, like a new sign-up.
Profit
Usually means contribution profit: what is left from sales after product cost, shipping, payment fees, discounts, refunds and ads. Net profit also takes off fixed costs.
Fixed costs
Bills that stay the same each month, like rent, software, staff and your own wage.
Theme
The design template for your Shopify store. It controls how every page looks.
Lead time
How long it takes from placing an order with your supplier to having stock ready to sell.
Landed cost
What one unit really costs once it reaches your warehouse: product, freight, duties and fees.
MOQ
Minimum order quantity: the smallest order a supplier will accept.
Product cost
What one item costs you to make or buy, including freight to your warehouse.
Reorder point
The stock level at which you should order more so you do not run out.
Bundle
Two or more products sold together, often with a small saving.
All words to know