QUESTIONS FOUNDERS ASK
How do I free up cash tied up in stock?
By Ivanka Menken, Strategic Mentor·Updated
Ivanka Menken starts with one stock decision, not the whole warehouse. List what you hold, how long each line has sat and what margin it earns, then decide which lines to stop reordering and which to turn back into cash first. Stock that sits is cash you cannot use for payroll or growth.
How does stock swallow the cash growth produced?
A strong month makes buying more feel safe. If the spike does not hold, the stock stays on the shelf and the cash that paid for it stays with it. The business looks busier than ever and the bank balance tells a different story.
What are the signs cash is locked in stock?
- You bought for a spike that did not repeat.
- Revenue is up and weeks of payroll covered by cash is down.
- You cannot say which product lines are tying up the most cash.
- Reorders happen out of habit rather than from a decision.
Which lines should you look at first?
The ones that hold the most cash and earn the thinnest margin. Rank your lines by the cash sitting in each and the margin each earns when it sells. The lines at the top of the first list and the bottom of the second are where the release usually starts.
Why decide what to stop, not only what to sell?
Clearing old stock frees cash once. Stopping the reorder that created it frees cash every month after. In Ivanka's work, scaling well is often subtraction: the product lines, clients or channels you stop are what make room for the ones that pay.
How do you know it is working?
Watch weeks of payroll covered by cash and gross margin on the monthly scorecard. If both move the right way while sales hold, the stock decision is paying off.
How does Ivanka work on this?
One stock decision fits a 90-minute Scaling-Is-Subtraction Intensive, and the margin-first test helps rank the lines.
What else do founders ask about this?
Should I discount old stock to free up cash?
Ivanka Menken looks at it as a trade between cash now and margin, and the answer depends on how long the stock has sat and what holding it costs. She helps the founder make that call deliberately for each line rather than across the board, and then decide what stops being reordered so the problem does not return.
How much stock should a growing business hold?
There is no single figure. Ivanka Menken's starting point is to know how much cash sits in stock today, which lines hold most of it and what margin they earn. Those three facts usually make the next buying decision clearer than any rule of thumb.
Is this financial advice?
No. Ivanka Menken is a strategic mentor, not an accountant or financial adviser. She reads the numbers with you, asks the questions and holds you to the decision you make. Your accountant does the accounts and advises on tax and financial matters.
What do I leave a session with?
In a 90-minute intensive with Ivanka Menken you leave with one stock decision made, the cost of delaying it named, and one first step written down and dated. It might be the lines to stop reordering, the lines to clear first, or the buying rule you will use from now on.