Money sitting on the shelf…

If I heard this phrase once, I heard it a million times from my accountant husband. Inventory is money sitting on the shelf.

Now, while some companies do not allow their consultants to order and carry inventory, mine did. For some of us, because we work many booths and conferences in the springtime, inventory can be a necessary evil, so-to-speak. People come to these events and expect to be able to purchase items on the spot.

However, if you carry (or plan on carrying) inventory - here are some things to keep in mind.
Don't purchase inventory from your `paycheck'. A few days ago, we talked about the 60-20-20 rule in terms of budgeting. (60% is your pay, 20% to reinvest and 20% discretionary). Inventory purchase is an example of discretionary spending.

DO remember, that if you purchase inventory, while it may make your personal sales look amazing for the month - if you don't sell the inventory, it just takes a bite out of what you are selling next month (assuming you are filling orders with inventory that following month)
Don't get into the habit of purchasing inventory to `make numbers'. (Been there, done that) - nothing takes a bigger chunk out of your ability to pay your bills than when you've reinvested your profits back into inventory. Product does NOT translate into milk and eggs at the grocery store.