Lara GuevaraSupply Chain expert (Product and Service)

It Was Never A Revenue Problem

11 Mar 2026 · 1 min

Watch on YouTube

1:09

Lara Guevara walks through a $3 million brand growing 40% yearly that ran out of cash despite being profitable. The founder didn't know her cash conversion cycle: 95 days to sell inventory, 27 days to collect payment, 15 days to pay suppliers. That 107-day gap meant she needed $900K just to keep the lights on. The problem was timing, not revenue.

Chapters

A $3 million brand growing 40% year over year always broke. Here's why. The founder came to me and said, we're profitable on paper, but we never have cash. I don't understand. I asked one question: what's your cash conversion cycle? Blank stare. She had no idea what I was talking about, so we calculated it together. DIO is 95 days. Her inventory was sitting for over 3 months before it sold. DRO is 27 days. She had a wholesale channel with net 30 terms flagging this up. DPO is 15 days. She was paying her suppliers in 15 days, faster than she needed to. CCC is 95 27 15 107 days. Her cash was trapped for 107 days. On $3 million in revenue, she needed $900K in working capital just to keep the lights on, not to grow, just to operate. It was never a revenue problem. She was growing 40%. It was timing problem. The cash was there, it was just trapped. Do you know your number? If not, we're calculating it this Saturday. Stick around.