About This Episode

On September 29, 2017, I closed the last store of my multi-location retail franchise. Months later, we filed for bankruptcy and lost our home. From the outside, the business looked wildly successful: seven figures, 13 locations, two invitations to the White House. Behind the scenes, I was writing myself paychecks I couldn't afford to cash.

In this episode, I share the full story of how it fell apart, the four warning signs my business gave me that I walked right past, and the profit math I wish I'd understood 20 years ago. If your sales keep climbing but your bank account doesn't, this one is for you.

Key Takeaways

• Revenue tells you how busy you are; cash tells you the truth. Record months meant nothing when I was still scrambling to make payroll the following Friday.
• Markup and margin are not the same thing. Marking a product up 3x is a hope. Margin is what actually happened after damages, markdowns, and discounts. One client discovered she'd given away $250,000 in rewards-program discounts in a single year.
• Gross margin is your secret weapon. A client in my program raised her margin from 55% to 61% in under six months by changing her product mix and saying no to inventory that wasn't turning.
• Your inventory is cash on hangers and cash in boxes. Every purchase is a dollar bill that needs to turn back into more dollars, fast.
• Set sales goals from the bottom up. Start with the profit you need to pay down debt and pay yourself, then work back to the revenue required.

Resources Mentioned