The Danger of Excess Stock
When I scaled my business to eight figures, the number one thing that nearly sent me bankrupt was stock.
So back in 2016, I had this mentality that when you start a business, you need a lot of stock. So I started stocking up. And as a business owner you’ll already know this, but there are these guys called sales reps. They’ll drive to you and show you the latest catalogues and offer you amazing deals.
There I was this young entrepreneur and I was just ticking it up – because it goes on an account right? I had stuff for undergrounds, overheads, internal, external, everything you can think of in this warehouse. It would have been about $80k to $100k work of stock.
30 days later I’m looking at my PNL and my bank account going where the hell is all my money? What I didn’t work out was that I had money sitting on the shelves that was depreciating. God knows it was probably secretly walking out the door, cable by cable or screw by screw.
Fast-forward to today, I have very minimal stock that I keep in the warehouse. I use a thing called the wholesaler’s warehouse. And guess what I do every time a sales rep calls me: *ignore*. No one gets to me – I’ve got a very good receptionist who I call my firewall.
Don’t get sucked into that sales rep trap. They’re your best mate when you’re spending money with them, but the second you stop buying, they completely forget about you as a human. They’re sucking the life out of you, they’re wasting your time and they’re wasting a lot of your money.
Don’t get used to carrying all this stock that’s depreciating and costing you a lot of money. Then you can watch your bank account grow because your cash will actually stay there!