When contractors think of cash flow problems, they usually look at receivables or expenses. But inventory can be a silent killer.

Are you sitting on piles of materials that aren’t being used? Maybe you’re over-ordering to “be safe” or storing more than you need “just in case.” If materials aren’t moving, they’re tying up your cash. Worse, some may become obsolete, damaged, or even stolen — especially if you don’t have good tracking in place.

Carrying excessive inventory drains your cash, bloats your balance sheet, and adds to your storage costs. On the flip side, understocking can lead to job delays and rush orders, which are usually more expensive. The key is balance and visibility.

Real World Mistake & Lesson:

One of our clients was carrying $65,000 worth of electrical components — enough for 4 months of work — because they feared running out. But they didn’t have a system to track what was being used or what was aging on shelves. After implementing a weekly inventory check and buying only for confirmed jobs, they freed up over $40,000 in cash within 90 days.

 Pick up your free copy of my new book, “The 7 Minute Conversation-How to Hear the Story Your Small Business Financial Statements Are Telling You-CONTRACTOR EDITION”.  Go to www.7MinuteConversationBook.com

Ready to find out where your cash and profits are really going? Book your free 15-minute Profit and Cash Flow Call with me. No pressure. Just real clarity. I’ll help you see where your money’s hiding — and what to do about it. Schedule at www.CashFlowCallWithLarry.com