00:00:00,000 it's not just about what you sell
00:00:01,666 it's about what you don't sell
00:00:03,300 is your cash trapped in your storeroom
00:00:05,266 we call it weeks on hand
00:00:07,100 one of our clients was holding 11 weeks of inventory
00:00:10,633 tying up over $16,000 in working capital
00:00:14,066 here in the fourth video of our fabulous 4 bar series
00:00:16,966 we're looking at an unusual metric
00:00:18,700 which we calculate called weeks on hand
00:00:20,666 it measures the amount of standing inventory you have
00:00:23,266 compared to what you use each week
00:00:25,300 so generally speaking
00:00:26,366 we wanna have a more modest inventory
00:00:28,400 so lower is better in general
00:00:30,400 we like to see bars keeping four weeks or less on hand
00:00:34,033 so they're not unnecessarily
00:00:35,100 tying up their working capital
00:00:37,566 what we see here is when you've got very high sales
00:00:39,766 of over $110,000 in a week
00:00:41,866 you can have an inventory of over
00:00:43,600 well over $100,000
00:00:45,266 and still not be too far off from this metric
00:00:47,466 this bar has a total of 260 products
00:00:52,066 we move on to the Midwest bowling alley
00:00:54,666 with more modest sales of $10,000 a week
00:00:57,266 their particular challenge is
00:00:58,466 they've got a big product selection
00:00:59,866 given their sales they have 265 different products
00:01:03,633 that naturally
00:01:04,266 means you just have to hold a backup of more products
00:01:07,300 and the end result in this case
00:01:08,433 is that carrying 11 times as much inventory in a week
00:01:12,000 if they got this down to even five and a half
00:01:14,433 they could free up over $16,000 of working capital
00:01:18,100 in the business here is a sports bar in Denver
00:01:21,066 sales just over $60,000 a month
00:01:24,600 in beverage sales
00:01:26,266 they've got $13,000 on hand
00:01:28,700 and they're almost hitting our ideal metric
00:01:30,633 of four times the inventory on hand
00:01:33,300 and they're doing a better job honestly
00:01:34,833 in managing their inventory
00:01:36,266 they only have 168 products we're tracking at this bar
00:01:40,600 and then showing the limits of this
00:01:42,433 a bar that's doing just a little less sales than that
00:01:45,066 this is a chain pizza restaurant
00:01:47,200 in the southeast of the country
00:01:50,033 they've only got 2.2 times as much inventory in hand
00:01:53,633 as what they sold last week
00:01:55,200 so they're only tying up $8,000 of capital
00:01:57,966 and that's largely a product of the fact
00:01:59,633 they only have 126 different products
00:02:02,700 one of the ways that they still provide an
00:02:04,700 interesting product selection
00:02:06,033 is that they have 10 beers on tap
00:02:08,166 and they are rotating those beers very rapidly
00:02:11,600 despite that fact they're still ringing up 97%
00:02:14,633 of all the beer that they pour during the week
00:02:17,066 missing just 6%
00:02:18,433 and really nailing on this week's on hand metric
00:02:21,766 meaning that again they're not tying up working capital
00:02:25,600 that could be spent on something
00:02:27,700 that would actually generate more business
00:02:29,500 thanks for watching
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