Cash is king, this we all know. Inventory is a common place to find cash locked up, being wasted.

Liquidity is power. It affords you the opportunity to make alternative decisions. With cash, you have choices and options. Without it, you are crippled.

Many business owners have far too much inventory. They believe that lots of inventory makes certain no one walks out the door without their purchase because it was not in stock. I get it, but more often than not, a small business owner may have thousands or even hundreds of thousands of dollars of inventory locked up just so every possible sale can be made.

Here is the rule: it’s far better to lose an occasional sale because you do not have the inventory then to invest enormous amounts of cash indefinitely, waiting until the sale occurs.

Here is the painful conclusion: You need to liquidate your own inventory irrespective of price or cost. Get your money out so you can use it. Leaving it trapped in inventory does not result in revenue you can use, so what’s the point?

The major barrier to liquidation is business owners simply discounting 10-20% and selling only a small percentage of their inventory, whereas reducing it by 50% might bring in the mother lode. It’s a “loss” they scream, they “can’t do it”. It’s a huge gain, I say, as all of a sudden you have liquidity—cash—and can make powerful growth-oriented decisions. You recapture unusable dollars. That makes sense even at 50% on the dollar.

Other benefits may be a lowered cost of overhead, as you may not need as much warehouse space. Insurance costs may be reduced, shrinkage may be less, waste or out-of-style stock may get smaller.

Better you should liquidate the inventory you have, converting the excess to cash, and then with liquidity, create as close to a just-in-time shipping situation as possible. In other words, order as few items as possible, as often as necessary, to keep them in stock most of the time. That works.

Bite the bullet. Sell it, liquidate it, at whatever price makes it fly out the door. You will find better uses for the cash.