Episode 47: From Debt to Margin: The Real Profit Strategy for Inventory-Based Businesses

If you’ve ever felt overwhelmed by inventory, buried in business debt, or unsure how to actually pay yourself—this is the episode you didn’t know you needed. Jennifer sits down with returning guest Ciara Stockeland, founder of Inventory Genius, for a real talk on what’s crushing profitability for product-based businesses—and how to fix it.

From understanding your balance sheet to why your pricing strategy might be broken, Ciara shares the hard truths (and hopeful fixes) that can help you reclaim control, reduce stress, and finally see profit. 

🎧 In this episode, you’ll learn:

• Why inventory is supposed to be an asset—but often acts like a liability
• The first step in escaping business debt (hint: it’s not another loan)
• How to stop relying on leftovers to pay yourself
• What to do when fixed costs like rent feel immovable
• Why shiny object syndrome is sabotaging your profits
• How one business owner reduced $18K/month in debt to under $5K—with no extra sales

🔥 Ciara’s Mic Drop Moment:

“Debt has no moral authority. It’s just a tool—but if you don’t know what it’s for or how to manage it, it will run your business instead of you.”

Meet Our Guest:

Ciara Stockeland, is a speaker, author, 4x Ironman and Fractional CFO for inventory based businesses. Ciara has owned and operated a business since her early teens. As a serial entrepreneur, her business, mindset and tenacity led her to opening her first store in 2006 which she then franchised. Her vast experience in both retail and wholesale industries led her to launch the first to market wholesale subscription box for boutique retailers, which she built and sold within 18 months. 

www.ciarastockeland.com

The Inventory Genius Podcast

Inventory Genius Book

Meet your Host: 

Jennifer Kok has been a business owner for over 25 years and now is a business coach. She turned her first business into a franchise and successfully sold it 20 years later.  She was passionate about building a business and a family at the same time.

I help Women Entrepreneurs who are in year 2+ who are building businesses and families to grow with Clarity, Confidence, and Consistent Profits.  The reality is you’ve built a Business You’re Proud Of -But It’s Time for it to work for you.

You’re still wearing all the hats, working long hours, and not paying yourself what you deserve. You know there’s more possible. More profit, more clarity, and more freedom to enjoy the life you’re building.

The Earn More Stress Less 9-Pillar Blueprint helps women entrepreneurs with families create profitable, sustainable businesses that finally pay them back — in money, time, and peace of mind.

Join me for a Free Online Workshop:
3 Steps to Boost Profitability: Strategic Shifts to Help Small Business Owners Make More Money.   If you want more profits follow this link to register. 

https://nextwavebusinesscoaching.com
Facebook: https://www.facebook.com/nextwavewithjen
Instagram:

You’ve Built a Business You’re Proud Of -But It’s Time for It to Work for You. You’re still wearing all the hats, working long hours, and not paying yourself what you deserve. You know there’s more possible. More profit, more clarity, and more freedom to enjoy the life you’re building.  The Earn More Stress Less 9-Pillar Blueprint helps women entrepreneurs with families create profitable businesses that finally pay them back. 

Transcript

Jennifer Kok (00:01.624)

Sierra, welcome back. I'm so excited to have you back on the show.

Ciara, Inventory Genius (00:05.168)

Yeah, thanks for having me. I really appreciate it.

Jennifer Kok (00:08.193)

You know, I just love your messaging and how you are helping. You are helping product-based businesses. So take us quickly through how you are helping your clients.

Ciara, Inventory Genius (00:18.438)

Yes, for sure. So I work specifically with product and inventory based businesses, retailers, wholesalers, distributors, makers, Etsy stores, really anyone who has some type of inventory that they're selling, subscription box businesses, and I help them create more profitability using their inventory. So most of the time when people come to me, which I know we're going to talk about this today, most of the time they have a lot of debt and they feel like they're in a financially stressful or financial crisis situation.

And so I liken it to having them being wheeled into the ER and they're on the gurney. And I have to figure out where the bleeding's coming from, diagnose it, and then figure out a plan of action. So that's what we do. And I always start with their inventory as a way to build some margin and really turn the business around.

Jennifer Kok (01:07.244)

And I think that's why you and I connect so well, because we talk a lot about profit, margin, paying yourself. And as business owners, I feel like sometimes that comes last. I love, read in somewhere you wrote, you didn't build your business to live on leftovers. That was a very profound statement, but for many of us as small business owners, they start out and whatever's leftover, they think, I'll just pay myself a little bit. So I really appreciate your focus on turning that around.

Ciara, Inventory Genius (01:23.698)

Yes, that's right.

Jennifer Kok (01:37.198)

So last time you were on, we just talked about, you know, healthy business and all that. And that was last year. And I'm just curious. Here we are recording the middle of 2025. It's been kind of an interesting year. You know, I'm hearing it from business owners that are feeling the pinch financially, feeling the margins kind of squeezed a little bit. You know, we're, we're inundated with just a noise, you know, if you turn on your TV.

Ciara, Inventory Genius (01:48.871)

Yeah.

Jennifer Kok (02:03.254)

What's changed for inventory-based businesses in the last year and how are you helping guide them through that?

Ciara, Inventory Genius (02:10.054)

Yeah, it's really interesting. think anytime you have an economic storm, if your balance sheet is very weak, you're really gonna struggle. And if you go into an economic storm or any storm with a strong balance sheet, you already have a leg up. And so in the nature of my business, like I explained, most people coming in do not have a great balance sheet. Meaning, like if we look at a balance sheet, the top is the assets, the bottom is the liabilities.

And so often their assets, so their cash or anything they can turn into cash is not great, but the liabilities is vast. lots of debt, they're owing a lot of people a lot of things. And what happens then, when we have any type of economic uncertainty and consumer behavior changes, we get really frantic in trying to bring in the sales because now we have so much debt to service that if we don't have the sales to cover it, we're gonna end up in even worse trouble.

and when consumer behavior changes and so sales naturally slow down, if we don't have the luxury of having assets, having cash and just taking it slower, we're gonna get really frantic. And so when I chat with people, I talk to them about first not blaming outside circumstances for what's happening in their business because yes, you could have construction in the front of your building, you could have a blizzard and the store shut down for a week. These are all true stories from my North Dakota days.

Jennifer Kok (03:31.352)

Ha ha ha.

Ciara, Inventory Genius (03:32.418)

Or you could have riots, like that kind of thing is going on right now, right? You could have economic uncertainty in the world, and we can blame those outside things for our lack of sales, or we can say that it's true, like those circumstances are actually happening. However, what tools do I have in my toolbox? How can I lean into my customer journey and things like that? But we can't do it if we're frantically chasing every dollar.

Jennifer Kok (03:59.014)

that's so true. And you're right. There's always going to be an external threat. I had a client who they changed the parking on her. She was located in a town town area. She serviced a lot of grandparents and all of sudden they changed the parking meter and these grandparents gave up. They were like very confused. And so then they kind of quit coming. And you're right. It creates a fear. creates this frantic thought process. So when you think about inventory, do you look at that as an asset?

Ciara, Inventory Genius (04:05.777)

Yeah.

Jennifer Kok (04:25.952)

Or is that a liability for business owners?

Ciara, Inventory Genius (04:27.635)

Yeah. Yeah, so your inventory should always be recorded as an asset. Most of the time when I start working with someone, the way that their bookkeeping is set up is on cash instead of accrual, meaning that the inventory is expensed out the minute it's purchased, which is not great because when you look at your financials, then you're never going to have a clear picture of what's actually happening. For an example, let's say you do $50,000 a month in sales.

and you just purchased $10,000 in inventory. If that is getting expensed out, so I bought it, it's going right on the P &L, now 50,000 minus 10,000 shows me that I have a $40,000 gross margin, which is amazing, like oh my goodness, you I have a massive margin. But the truth of it is that $50,000 in sales could have actually cost you what the product.

know, costs that actually left could have been 25,000, could have been 30,000, and you might have a much lower margin, so your bottom line might look amazing, but you're never seeing cash in the bank account. So instead, we want that inventory to stop on the balance sheet first. It's an asset until it's sold, and then the cost of what's sold gets expensed out over on the P &L. And so that's really important to have that lined up accurately, so you really know what asset you own, and then when it's gone, that's when you realize the expense from it.

Jennifer Kok (05:45.282)

And that's really good stuff, good tips there and something to have a conversation with your CPA because probably a lot of businesses are relying on them and make sure your CPA really understands a product-based business for sure.

Ciara, Inventory Genius (05:56.88)

Yeah, if you have any type of inventory, I mean, I know you have a lot of service based businesses that listen to you, but they might have an inventory component. So they might be the vast majority of it might be service, but maybe they have their own personal merchandise or something like that. You want to make sure that you're on accrual accounting anytime you're inventory based, not cash accounting.

Jennifer Kok (06:16.526)

Good to know, good to know. So let me ask you this. Recently, there's been so much chatter about tariffs. So were a lot of your clients is the first instinct to load up on inventory in case these tariffs impact my costs of goods going forward? were there any conversations around that or what would you say to that topic?

Ciara, Inventory Genius (06:37.094)

Yeah, so the first thing I would say is like, if it doesn't affect you, stop talking about it. I think so many businesses were coming to me, they're all worried. And I'm like, you don't import anything. So why are you wasting any of your time? Chitter chattering, complaining, whining, gossiping. I can be kind of hard-nosed as a coach, because I'm like, we don't have time to fiddle faddle around. So if it doesn't truly affect you, then get to work, put your head down, and follow the plan we already made.

Jennifer Kok (06:41.523)

Hahaha!

Jennifer Kok (06:52.706)

hahahaha

Ciara, Inventory Genius (07:03.516)

But I did have a couple clients who do import. One in particular imports for a subscription box model. And so what she did, she had some things coming in. She was able to go to those manufacturers and say, hey, what can you do for me? Because I can't pay, you know, 140, like that's not my budget. And so she was able to negotiate where they actually said like, hey, we're going to, we're going to honor original pricing. But she was proactive with that. Like she had a conversation instead of waiting for it to land on the docks in LA and then trying to figure it out.

And then secondly, what she did is, okay, if this is gonna be a long-term thing or even if it's not, this is forcing me to be smarter with my business. And that's what I think, you know, the US in particular, American entrepreneur is very resourceful when we are forced to be. But then when things go well, we get really lazy. And so in these times, you know, where, okay, I don't wanna pay, it's not 145 % now, but when I was talking to her, was 145 % coming in from China.

Where else can I manufacture? I haven't looked into it before because I haven't really had to, but this is a great opportunity for me to get smarter. And in fact, she was able to find some other sources of inventory that are going to be better quality and better pricing. you know, I think number one, if it doesn't affect you, don't waste your time muddling about it because we can waste a lot of time, you know? Yeah, so much energy. And then if it does affect you, be a problem solver.

Jennifer Kok (08:24.223)

yeah, and energy and mental energy. Yes.

Ciara, Inventory Genius (08:30.278)

because sitting behind the counter and complaining about it is not going to move your business forward. So how can you be a problem solver and proactive?

Jennifer Kok (08:38.68)

You know, and usually I always find these type of circumstances, you do end up pivoting a little bit and then you end up stronger in the long run. Love that, good stuff. Okay, so a lot of people come to you with debt. So let's talk about debt because this can be one of those topics that is very confusing, especially, you know, a lot of us are, listen to Dave Ramsey and know, cash is king, debt is bad.

Ciara, Inventory Genius (08:44.466)

Yeah.

Ciara, Inventory Genius (08:48.348)

Yeah. Yeah.

Jennifer Kok (09:01.014)

A lot of us, if it's a brick and mortar, they probably had to build out something. I know when I built out my bakery, that was a big expense. And we just don't have cash sitting reserves to go build these things out. So how do you manage the debt piece of your business? What do you help your clients with?

Ciara, Inventory Genius (09:07.922)

Right?

Ciara, Inventory Genius (09:17.682)

Well, I think first it's important to know that debt has no moral authority. So it's neither right nor wrong, good or bad. It's a tool. And so if you have debt or you're thinking about debt, it's important to figure out why you need it and what you're going to use it for. So like in your circumstance and in mine, I had brick and mortar, we had a small loan, $20,000 loan to start, but it was debt, right? But we needed that to do our fit up and to buy our initial inventory.

So there was a purpose for it. That's much different than a lot of times by the time people get to me, we have so much debt, multiple capital loans, multiple credit cards, conventional loans, loans to family, like I have seen it all in every combination. And that comes because we're not operating our business properly. And so instead of fixing that problem of what does it actually cost to run my business? How can I be cashflow positive? What is my margin? We just keep taking on debt.

And I did that too, so when I speak to all these things, it is the hard lessons I learned. I just thought, well, if I have a little bit more money, I can buy inventory, and then I'll get ahead, and then I'll get ahead. But I didn't understand the root of what was causing the problem. So I think with that knowing it's a tool, but when we have it, we need to know what the purpose is going to be for it, and why we need it in the first place. That's really gonna change the outlook.

I just heard a let's call her a business coach. There's so many people out there. The other day she was on Instagram this lady and she was on a reel talking about how to rethink the way that you look at debt and like it could actually be a really good thing for you. It really riled me up Jennifer. Because I it riled me up because I talked to so many people that are on such a the opposite end of that where they are so stressed out. They their mental health their

Jennifer Kok (10:53.55)

I bet.

Ciara, Inventory Genius (11:07.528)

personal health, everything is, and I said, how can someone be encouraging people to just willy nilly, just take on debt, it'll help you grow. The borrower is the servant to the lender, no matter how, it is what it is. So if you owe people money, they are your master. The bank, your mom, you know, I I've seen it all, right? And so we can't belittle that and say that's not the case, it truly is the case.

Jennifer Kok (11:22.112)

Exactly.

Jennifer Kok (11:29.165)

Right.

Ciara, Inventory Genius (11:35.93)

And so I like to encourage people to think about why are we here? Not in a way to shame and guilt you, but let's figure out the reason. And then where do we want to be? And how do we cut out the root that's causing this constant cycle of debt? Because if we figure that out first, then we can truly tackle the debt and actually get rid of it and solve the problem.

Jennifer Kok (11:58.114)

That's so good. So what do you see a lot that comes up to be the root?

Ciara, Inventory Genius (12:02.504)

Not knowing how much it costs to run a business. Yep, and if you have inventory, not understanding your margins. So I just worked with a gal today. She just shared a testimonial in our mastermind group. I've been working with her since February. When I started with her, she was servicing almost $18,000 in debt a month. That is not sustainable. So we were going to go under, we were gonna close up shop, we were gonna file bankruptcy.

Jennifer Kok (12:21.058)

Wow. No.

Ciara, Inventory Genius (12:27.58)

And I said, no, we don't need to do that. We're gonna have to change behaviors. We're gonna solve this problem. We're gonna figure out this puzzle. We are down now to less than $5,000 a month in debt service. And the massive cash flow influx that that puts into the business is huge. We're not making more money. We're not selling more stuff. We're not paying for marketing. We're not getting more people through the door. We've figured out how to reconfigure that. And alongside that, build margin.

because the margin will continue to eat away at that debt. So on the other side of it, when I started with her, we were low 50s or below 50 % margin. Now we're inching closer to 60 % margin. That's just excess cash. And that's again, we're not selling more stuff. We're not buying different. We're not stocking different. It's just using the tools that we have and understanding what it costs to truly run a business, what the inventory plays into the sales, pricing properly, all of those pieces.

Jennifer Kok (13:22.424)

Boy, you're a lifeline. You are definitely a lifeline for these people because you're right. Most people drowning in that kind of debt, it's exhausting. And like we said, you're the servant to the lender and a horrible place to be. Whether it's personal debt or business debt. And what I find a lot of times is those two intertwine because people use personal funds to fund their business. Do you help people kind of understand

Ciara, Inventory Genius (13:31.142)

Yeah.

Ciara, Inventory Genius (13:35.26)

you are. And that's a horrible, like that is just, yeah. Yep.

Jennifer Kok (13:50.766)

What to do with all, like you said, a lot of people have different credit cards and they have all these different sources. Do you encourage them to go to their banker, maybe get an SBA loan? Do you try to consolidate that too? Is that part of the process?

Ciara, Inventory Genius (14:02.586)

Yeah, usually it is, but it's funny because people come and they want to jump to the end and I'm like, nope, we got to start at the beginning. Like there's a framework that I use with everyone. And the first thing I honestly do is make them build a business budget because yes, we want to pay off the debt and my goodness, I'm going to die and I can't breathe and I have no money. I understand that. But if we, again, if we don't figure out the root of the issue, we can reconsolidate, you can get another loan, you know, we can do all this fancy schmancy stuff over here, but

Jennifer Kok (14:09.634)

Yeah.

Ciara, Inventory Genius (14:30.992)

in a couple months you'll be right back in that same place. So we build out a business budget first to help them understand what's actually going on in their business. I had a client do this, I mean this happens a lot, but she literally spoke it, so I'm gonna share this. I had her build it out and I have a tool that I use, it's Excel tool that I built out, but it populates either green or red, so at the bottom if we're negative or positive.

And she built it out and she's like, everything's red. And I was like, yes. And that's why you are in trouble because you're running your business at a cash deficit before you service the debt. This had no debt included. This is just selling the stuff, paying my people, cash deficit month and month and month again. And so then we build it into a place where, okay, we want those squares to turn green. We want to build and plan for a cash positive business. And then that also has to service the debt. Once we figure out that there's aha moments of like, my goodness, I'm not pro-

Jennifer Kok (15:05.646)

Mmm.

Ciara, Inventory Genius (15:24.232)

pricing properly or my average ticket or different things that I work on with them. And then we say, okay, now we have this debt, what do we tackle first? And I don't have them tackle credit card debt first. Like we always go for the capital loans because they take cash right off the top every single day. And so what can we do to make sure that we have the best cashflow positive day that we possibly can? And so we tackle those. So I have a certain rhythm that I have them follow when it comes to debt as well.

And then reconsolidating debt is often part of that plan, but I don't encourage it until I know that we have a budget, you know how to stick to it because otherwise again, it's like we free up all this money by reconsolidating. But if you haven't changed your habits, you're gonna be in the same place again, only worse, because now you have a massive loan and then you're gonna go back and take out more credit cards and all things.

Jennifer Kok (16:11.702)

Right. Well, and I think you just nailed something when you say habits. You know, these are challenges for business owners because sometimes the repetitive, the mundane, staying in the course, the consistency feels boring. And so they want to go chase the next shiny object or go add the next product that's on TikTok. And we can get really caught up in all of that. And that's why it's so important to bring somebody like you alongside of them, because you're keeping them focused.

Ciara, Inventory Genius (16:34.834)

Yeah.

Ciara, Inventory Genius (16:39.964)

Yes.

Jennifer Kok (16:41.164)

I like physically, I feel lighter talking to you because I can see your clients just like when they get through some of that debt mound and not have to take a big huge loan to pay it off is just so refreshing. You just feel lighter just thinking about that process.

Ciara, Inventory Genius (16:48.232)

Yeah.

Ciara, Inventory Genius (16:55.15)

Yeah, yeah. And I think, you know, when we're in the middle of it, we feel so stuck. Like, it's no fault of theirs. I mean, I was in the same place too, you know, and I had mentors and great people that came alongside me and helped point out, okay, Sierra, I know you think you should focus on this, but actually this is what you need to focus on. I didn't know that. And even if I had the knowledge to know that, I wasn't in a place that where I could see clearly, everything was being done off of emotion.

And so having someone to come in and say, I'm not attached to anything. I don't care about your inventory. I don't have an emotional attachment to your mom. Like I don't care, you know? And so we're going to say yes to this and no to this. I'm working with a new client right now and I, you know, had lots of ideas and I'm like, those are great, but we're not doing that now. Or I understand that he's wanting this, but this is the plan we made on Monday. And so you're going to tell him no. And if you can't tell him no, you're going to say,

Jennifer Kok (17:31.669)

You

Jennifer Kok (17:42.669)

Yeah.

Ciara, Inventory Genius (17:51.472)

My CFO said no and used me as the bad guy. And so there's just some, there's some peace in that as entrepreneurs, we get really decision fatigued. We're making so many decisions trying to get things to work. And I remember being in that spot, like I can't pivot one more stinking time. And so just having someone that says you actually don't need to, like, here's what we should look at. Let's just get through the mess and figure out, make a plan is really helpful.

Jennifer Kok (17:53.612)

Right.

Jennifer Kok (18:19.19)

And I also think we have to remind people that these things take time. You know, you're not going to get out of $18,000 a debt in a month in three months. It's going to take time. And we have to honor that time, but continue to show it for ourselves, our businesses, and it will come. The results will come. So one topic that comes up a lot when I work with service-based businesses that also have a brick and mortar space is their rent.

Ciara, Inventory Genius (18:26.928)

Yeah. Yep.

Ciara, Inventory Genius (18:36.413)

Yeah.

Ciara, Inventory Genius (18:44.571)

Yeah.

Jennifer Kok (18:45.27)

and rent has gotten very expensive and that can be a huge chunk of their revenue. How do you navigate that conversation with your clients, especially because they probably have two to three years left to go?

Ciara, Inventory Genius (18:55.708)

Yeah, so everything, we have options in everything. So I tell people all the time, you have lots of options. You always have options. So first, I want you, if you're listening, to like write that down and put it on your mirror, put it in your back room. We think that we are stuck. We always have options. Now, options always have consequences. Some are good, some are hard, some are bad, right? But there's always options out there. I had a gal the other day, I was talking to her and she said, can I just scream? And I said, yeah, go for it. And she's quiet. I'm like, seriously, you can scream.

You can throw your keys in the lake if you want. You can fire everyone today. You have lots of options. There's consequences to them, but you have them. So I think when we think about things specifically like rent, right? We have options. So we can keep paying it. We can go to our landlord and ask to renegotiate it. We can look at like, is there a way to sublease it or can we offset the price by bringing in some other vendors or co-renters? So.

Jennifer Kok (19:32.846)

You

Ciara, Inventory Genius (19:52.457)

never look at something that you're in and say, well, this is what it is. I guess it is what it is. What could we do to get creative with that? And the answers to all of those things might be no, you're not allowed to sublet it, they won't negotiate it, whatever, but now you know. So instead of sitting behind the counter and like ruminating over it and like talking to everyone and their brother about how much you pay in rent and how much you hate it, which we love to do, right, commissary? Let's go to town and like, let's go after it and let's ask.

Jennifer Kok (20:05.698)

Right.

Jennifer Kok (20:13.71)

We do.

Ciara, Inventory Genius (20:20.41)

I just had a client who had a contract that one of her employees had put into place and it was not serving her well. She found out about this and I said go back and ask to negotiate it and can I? Of course you can. Of course you can. And the company she negotiated with was very kind and favorable and actually gave her a discount and like better turn. All she had to do was ask. And so let's ask. You know, let's ask the question.

Jennifer Kok (20:47.65)

Right, if you don't ask, you never know. Great stuff, and you're right. That's something I think we just feel we don't have that option, especially with those fixed expenses. So as parting words to anybody listening who is a little debt heavy right now, your advice to them is...

Ciara, Inventory Genius (20:49.425)

Yeah.

Ciara, Inventory Genius (20:54.982)

Yeah. Yeah.

Ciara, Inventory Genius (21:05.563)

Yeah, I mean, I think you have to drill down and understand where the debt came from. Like, be honest with yourself about why you have it. Because if you aren't honest with yourself, you're never gonna fix the problem. And then I think you really have to decide if you really care. Like, we can be uncomfortable in our uncomfortableness, but sometimes we're addicted to that feeling of chaos and being uncomfortable. And until you really say like, I don't want this.

I know where it came from, I know the mistakes I made that got me here, and I'm no longer willing to live life like that and build my business like that. If you can draw that line in the sand, you can get out of it and you can fix your problems. But if you go halfway and you kinda don't wanna do the hard work or you're not honest with how you really got there, you're always gonna stay stuck.

Jennifer Kok (21:53.73)

Good stuff, Sierra, thank you so much. So tell us a little bit about your programs and how people can get plugged in.

Ciara, Inventory Genius (21:59.526)

Yeah, well first they should listen to my podcast too. So Inventory Genius, I know a lot of your people don't have inventory, but I talk a lot about numbers and finances and things, so it really can help so many people. So Inventory Genius is my podcast, and then you can just head over to my website, siristalkland.com. I have lots of good free resources, my books. Inventory Genius and Profit Genius are both on Amazon, so those would be a good place for people to start too.

Jennifer Kok (22:23.47)

Well, thank you so much. always just appreciate your wisdom, your candidness, your tough love. mean, sometimes we just need a little bit tough love. as entrepreneurs, you're right. It can be lonely. And bringing in people like yourself can make all the difference in the world. So thank you so much for sharing your wisdom today.

Ciara, Inventory Genius (22:40.432)

Yeah, thanks for letting me talk. I appreciate it.