As a small business, your inventory is likely your most valuable asset. Without it, you cannot perform the services or produce the goods your customers rely on for their needs. This means securing it against the many liabilities you face requires actionable steps designed to mitigate perils or replace it all after suffering damage.
Not sure if your current inventory security standards are enough? Below are some additional safeguards to secure your stock and give you peace of mind.
1. Hire Dedicated Security Personnel
If your business would come to a crashing halt or suffer severe financial harm if your inventory were lost, consider having security personnel on-site. These highly observant professionals ensure that anything out of the ordinary gets adequately investigated while patrolling your storage areas.
If cost is a concern, there are quite a few third-party security services you could rely on to perform these duties. You might find this is more cost-efficient than hiring your guards. Often, their presence alone acts as an effective deterrent at businesses they patrol.
2. Conduct Regular Inventory Audits
Do you have issues with never having the right amount of stock in inventory? Consistent inventory audits can provide insight into why this is happening and address the issue. To complete this process, you or a team member will take a count of current inventory and then compare it with your sales, purchase, and internal records. From there, you can isolate areas of shrinkage and determine if it’s a spoilage issue, theft, or improper use.
3. High-Tech Security
If having on-site personnel is not an option, you might find that technologically-based security will suffice. A combination of door and window alarms, cameras, and motion-activated lighting is best to create a comprehensive system on-site. You might also consider installing signage warning would-be thieves and vandals they are being recorded. With automated alerts, the police receive a notification when someone trips a sensor. Some companies even install advanced doors and lock to protect sensitive areas only authorized personnel can access.
Thanks to mobile technologies, you can instantly access your security system and cameras from an app on your favorite smartphone or similar device.
4. JIT Inventory
A Just-In-time (JIT) inventory system creates an automated purchasing strategy that reorders stock at the most optimum time. This means less time spent storing goods on-site since products get delivered directly to your store’s shelves as required. The JIT method is popular with multi-branch chains because inventory is kept at a centralized location. In addition, with fewer opportunities for theft, security measures are reduced, significantly saving associated service costs.
5. Carry Adequate Business Insurance
Business insurance will prove the most reliable protection for business owners with a traditional store, office, restaurant, or storage facility that houses any amount of their inventory. Commercial property handles damages to your building, furniture, equipment, fixtures, supplies, and merchandise. In situations where you only rent your space, your assets inside the building are protected. This includes any customizations you made, such as upgraded cabinetry or custom lighting.
The benefit of this coverage is crucial because:
Recover from Total Losses Faster
Consider this if you’re unsure you have enough inventory to insure. While stock loss is an inevitable part of running a business, what would you do if you lost it all at once? Imagine the cost of replacing an entire warehouse of destroyed goods due to a sprinkler system flooding your storage shelves.
How would you absorb this cost? What if your business couldn’t? Insuring against this level of damage is vital to the survival of your organization and minimizes interruption to your operations.
Commercial Property Reassures Stakeholders
The level of risk your business must balance directly impacts partners, investors, and others with a stake in your company. Having the mechanisms in place to protect your inventory against different perils, such as damage or theft, breeds confidence in your brand’s resilience in times of trouble.
Insurance Is Often Mandatory
If you lease your workspace, have investors, or recently acquired a new fulfillment partner, commercial property coverage may be required to do business with these parties. Even your insurer or industry regulators might demand this as an additional layer of protection depending on the products you use or sell as part of your business.
Protect Your Bottom Line
When purchasing a commercial policy, check the fine print. For example, many insurers compensate for lost revenue due to missed sales while waiting for new inventory to arrive.
Final Thoughts on Safeguarding Your Inventory
Many outside factors can cause damage or loss to your stock. From mother nature to theft or equipment failures, the events that lead to these incidents vary greatly, but the result is always the same: financial harm. Protecting your business against these events is crucial and can only be accomplished with commercial property insurance.
Instead of being concerned about how much is commercial property insurance, you should focus on the financial losses you could potentially suffer without this important coverage. Consider speaking with a knowledgeable insurance agent about these risks and learn more about available policy features available to replace your stock and lost revenue.