March 2024 Managing the Money with Ciara Stockeland

managing the money the inventory genius newsletter Mar 01, 2024
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Need More Money?
Here are three levers you can pull.


Are you constantly asking, “Where is all my money going”? If that is you then chances are you have a cash flow problem.

Cash flow by definition is the movement of money in and out of a company. This means when the sales come in, the cash flow comes in. When a bill is paid, or a debt payment is made, the cash goes out.

A “cash flow problem” typically means more money is flowing out than is coming in. So what do you do if your cash flow is not where you want it to be?

There are three levers we can pull, or areas we can focus when this is the case. 

  1. Margin. You hear me preach it, but I will shout it from the roof tops again! Margin is where the money is. Your margin is the difference between the sale of an item and what you paid for that item. If you paid five dollars for something and you sell it for ten dollars, your margin is 50%. Your margin is not your markup. Can I say that again? Your margin is not your markup. If I bought something for five dollars and marked it fifteen but then ended up actually selling it for ten dollars because of a discount or a coupon or whatever the case, the five to ten is my margin. It is calculated when I sold something for at the end of the day. When we look at cash flow issues, I always start but pointing out whether you have enough margin.
  2. Expenses. Our second level to pull is decreasing your expenses. Now you cannot grow a business by constantly decreasing your spending, however most often there are things we can cut from our spending. Are you watching payroll hours? Can you re-negotiate the rent? Can you eliminate wasteful spending on apps you don’t use? If you are running into cash flow issues, you make be overspending what you have available from your margin.
  3. Sales. Lastly, we can pull the top line sales lever. How can we simply get more sales? This is the last level we look at because first, you have your margin in line and your spending under control. If you just work on increasing sales, your spending will just follow those sales resulting in even bigger issues.

For more information on cash flow and how to right size it in your business, listen to these episodes of my podcast:

#151: Inventory Genius: Focus on Increasing Sales
#152: Inventory Genius: Focus on Increasing Margin
#153: Inventory Genius: Focus on Decreasing Expenses

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