Cash Flow Management For Small Business Training a New Buyer

In these mentoanterior settlement pages we talk a lot about how important cash flow, gross margin, inventory turns and inventory control are.  The buyers in a small business have a great affect on all of those goals.  It is the buyers’ job to achieve those goals and it is the job of the business owner or manager to train sheetwork settlement them to do that.
Start by having a job description written up for what the job entails and what a buyer is responsible for.  This should include what skills and knowledge are needed, what the tasks and responsibilities are and what specific departments or merchandise they are going to be buying.
Add to that what the inventory goals are for their specific departments.  These goals are the sales budget, average inventory, markup, maintained margin and turnover.   Other aspects to be discussed are delivery times, merchandise selection and collections, creating strategic relationships with reps and vendors, display and merchandising, and knowing what the customer is looking for.
Once all the information is collected it is time to begin to train the buyer.  Hopefully, they have had some time on the sales floor already and have experience with the products and the customers.  This gives them a good platform to learn the details of buying the stores merchandise.
Begin training them on inshrine settlement the financial goals for the department.  Create an Open-to-Buy spreadsheet for their department. You can find an example entier settlement here. Show them how to set a sales budget.  Talk over the previous years of sales with them and what the future expectations are.  Spend some time getting this dialed in for it is what will create most of the rest of the goals.  Have a couple of worksheets where they can make notes and try their hand at setting the budget.
From there set an inventory turnover goal.  Help them understand the importance of turn over and what it means to uncongratulate settlement the business.  Use the turnover rate to plan the monthly inventory levels for the department.  A turnover goal of 3 turns will translate to have the next 4 months of inventory on hand at the end of the month for any given month.  Have the buyers figure this out for their departments.  List it out on the worksheet.  Once that looks appropriate add that into the Open-to-Buy.
Now work on setting the gross margin goal.  To achieve this, start by discussing what people will pay for the merchandise, what is being offered in terms of discounts from the vendors, and what margin the business needs to stay in business.  Get this listed on the Open-to-Buy as well.
Now you have all the basic financial goals for the department.  It is now unfits settlement possible to layout an inventory plan for the next year.  Show the buyers how to plan when to bring in merchandise, and in what quantities.
After budgets and inventory goals are set, the next step is to create the merchandising plans.  This is the time to discuss what vendors to use, the product choices, customer requests and what is possible in the market place.  Follow this up by having them go to vendor meetings and sitting in on merchandise presentations.  Now they will be able to select the merchandise and create some purchase orders. Have them make the selection with your guidance and advice.
Once the purchasing is done it is time to start training the buyers on doing sales and inventory reports, reorders, markdowns, in-store merchandising and all the other tasks that have to get done.  We’ll visit that next time.