3-Steps to Extracting Cash from Your Business Inventory

I’m the CFO that 6- and 7-figure entrepreneurs call when they want to get to the next level in their businesses; I help them get there by focusing on cash flow.  By that, I mean providing clear visibility into the next weeks and months of bank balances so that business owners can make intelligent decisions right now.

One of those decisions relates to finding cash in inventory.

Do you have inventory sitting in your office or warehouse or store just taking up space and gathering dust?

If you do, you might as well just put a pile of hundred-dollar bills on the floor and pretend you can’t touch it.

Yes! Think of your unused inventory as piles of cash you can’t touch.

This happens to many distributors, manufacturers, and retailers; but there are ways that you can give yourself and your business access to that pile of cash.

In fact, here are 3 steps you can take TODAY to get there:

  1. Find out exactly how much inventory is sitting there and how long it’s been there. Make a list, and sort it from oldest to newest or highest value to lowest.
  2. How to get rid of those items:
    1. Try a ridiculously low sale price for items that have been there the longest; OR
    2. Find someone in your same line of business who will buy these items from you at cost, or a little below cost (maybe they don’t need the volumes they have to buy from their normal vendor, or maybe they can get them more quickly from you!)
  3. Bundle these items with other things that you can sell for a small markup.

Take a second and realize this key fact: Even if it makes you back less than what you originally paid for the product, at this point, it is still money in your pocket.


Here’s a real-life story for you:

Dark brown dog choosing a toy from a pink container labelled "Doggie Toys" holding many colorful dog toys

I worked with a business that had a dog toy that just would not sell. Period.

The owner loved it when she ordered it, but it sat on the floor for months and just wouldn’t move.

Every day it sat there, they were losing cash:

  • Losing cash from sales of other products that WOULD sell from that same space
  • Losing cash by not doing anything with it

So, after we tried the easy stuff – a big sale – we decided to bundle the toy with another item we sold and create a new “bundled” price.

We put two of the toys inside a dog bowl (only in half the bowls on hand) and bumped the price up for the new adorable bundle.

And guess what?

The dog bowl with the toys sold! Like crazy!

That one creative move turned a pile of dusty, “unsellable” inventory into $2,500 just like that; all of a sudden we had more space on the floor to stock high-selling inventory.

So come up with your own fantastic ideas that I haven’t thought of and move that inventory!


Author, Virtual CFO, and Finance Coach
Your First CFO: The Accounting Cure for Small Business Owners” on AMAZON