11/07/2012 11:10 am ET Updated Jan 07, 2013

Harry Potter's Top 5 Small Business Tips

I love this time of year when the trees turn golden colors, the air is getting cool and crisp, and magic is in the air. With this in mind, I'd like to share a creative way of looking at the business world. I recently noticed that the Harry Potter series has quite a few insights into running a business and managing inventory, specifically.

So let's journey to Hogwarts as we discover five small-business lessons from Harry Potter!

1. Limit your product selection
Bertie Bott's Every Flavour Beans live up to their name by offering every flavor known to man, including particularly unsavory ones. But who would really want to taste every flavor imaginable? It's neither practical nor desirable in the real world.

This is an important lesson for businesses. In most cases, you don't need to diversify your products too much. In fact, by streamlining your product line and limiting customizability, you can save money and avoid confusion for your customers. That should make the bean counters happy.

2. Find your niche and stick with it
Wands play a major role in the world of Harry Potter. It makes little difference which broom, feather pen, or cauldron a wizard uses, but every wand is unique. Its effectiveness depends primarily on the personality of the wielder. Harry goes through several wands at a store before he finds the right one that's meant for him.

Like Harry, you need to find what works for you and stick with it. What makes your company different than any other company? What keeps your customers coming back? Find your special traits and make those your big selling points. Are you the fastest, most attentive, kindest, least-expensive provider of your specific products or services? Let people know, and before you can say abracadabra they'll come and see what makes you so special.

3. Even the most secure safe can be cracked
The Gringotts Wizarding Bank in Diagon Alley is supposed to be impregnable, but on a few occasions thieves have managed to get through all the security and break into one of the bank's vaults. If a magical bank protected by goblins and all sorts of spells can be burglarized, nowhere is truly safe.

That's a good argument for limiting the amount of inventory you keep in your warehouse to just what you need and no more. Minimize the amount of damage that could be done by limiting the amount of inventory you have that can be stolen at any given time. Of course, you should have appropriate security measures in place to protect your investment, but they may not always be enough.

4. Time is precious
One of the sillier things in the Harry Potter series is the Time-Turner. This device allowed Hermione Granger to double her class schedule one year. But it introduces a serious plot hole because if wizards have time machines, they could just go back and prevent Voldemort's ascension and all sorts of problem from happening in the first place. Luckily (for the story, at least), all the Time-Turners were eventually destroyed.

In reality, there is no magic time machine that grants you the power to do two days' work in a single day or to undo costly mistakes. There is, however, inventory management software and other tools that allow you to delegate responsibilities to employees and help them be more efficient. It also prevents serious data-entry errors by using barcode scanners to enter order information instead of hand typing on a keyboard. You won't need a time machine when you can do the job right the first time.

5. Be prepared
The Room of Requirement was introduced as a plot device to serve whatever needs the characters happened to have. If they needed a meeting room, it became a spacious hall with enough chairs for all attendees. If they needed storage space, it gave them numerous rows of shelves to choose from. That room was so flexible, it could help them with any situation.

Do you have a Room of Requirement? I'm talking about a tool that is flexible enough to meet your needs under changing conditions. One example is Fishbowl Inventory. It is a great tool for small businesses with just one location. And it can grow with your business as you add locations and need to track more inventory, thanks to its optional add-ons: Fishbowl Mobile, Manufacturing Option, and many others. With so many extra inventory management features and solutions, Fishbowl can be your business' Room of Requirement so you're prepared for all the challenges and opportunities that come with growth.