Quote of the Week

"The road to success is always under construction."

~Lily Tomlin

This Week’s Tip

Cash Flow Secrets Every Startup Founder Needs to Know

Listen up, because I’m about to hit you with the most critical lesson you’ll learn in your first few years of business: Cash flow is your business’s lifeblood.

It’s not sexy. It doesn’t get the headlines. But if you don’t manage cash flow effectively, your business is dead. Period.

Here’s the cold hard truth: Most entrepreneurs start out thinking they need more customers or better marketing to succeed. But what they really need is to control the flow of money. If you can’t make sure the cash is moving in the right direction, all the customers in the world won’t save you.

So how do you actually manage cash flow? Let’s break it down.

1. Know Your Numbers Inside and Out

First things first, you need to know your cash flow statement better than the back of your hand. You don’t have to be a finance whiz, but if you don’t understand where your money is coming from, where it’s going, and when it’s coming in, you’re flying blind.

Track all your inflows and outflows. I’m talking every cent. Be ruthless with it. This means knowing when customers pay you, when your bills are due, and how much you need to cover the next month’s expenses. Use accounting software or hire someone who can keep it all straight for you.

2. Avoid the “Revenue Delusion”

When you hear “cash flow,” don’t just think “revenue.” Revenue is the top line number—it looks great on paper, but it’s not the full picture. You can be making millions in revenue and still go broke if your cash isn’t flowing right.

The key here is collections. Getting money in the door is just as important as getting the sale. If you’re selling on credit, you better have a plan to collect on those invoices quickly. If you’re waiting 30-60 days to get paid, that could mean you're running out of cash in the meantime and scrambling to cover payroll or other expenses.

3. Control Your Outflows (Even When It Hurts)

You’re going to want to reinvest everything back into your business. But cutting costs ruthlessly is an underrated part of cash flow management. This doesn’t mean firing people or slashing your budget at every corner, but it does mean being strategic about where your money is going.

Use zero-based budgeting: Every dollar you spend should be tied to a specific result. If you’re spending on software, marketing, or other tools, make sure they’re contributing to your growth. Don’t fall into the trap of buying just to buy.

Also, pay attention to timing. When possible, try to delay expenses while pulling in revenue quicker. Negotiating better payment terms with suppliers or offering early-bird discounts to customers can help smooth out the peaks and valleys of cash flow.

4. Build a Cash Reserve

I can’t stress this enough: You need a cushion. It’s not just about how much you’re making—it’s about being able to weather the storms. No matter how much you hustle or how great your business is, unexpected expenses or lean months will come.

Aim to build a cash reserve that covers at least 3-6 months of operating expenses. This gives you the flexibility to make decisions based on what’s best for the long-term, not just what will keep you afloat this month.

5. Have a Cash Flow Forecast

Get ahead of potential cash flow issues by forecasting. If you know you’ll have a slow month coming up, start planning now. Look at the previous months’ data, identify trends, and make projections for the next 3-6 months.

Cash flow forecasting helps you see potential problems before they hit. It allows you to act proactively—whether that means reducing expenses, finding new revenue streams, or adjusting your sales efforts to match the forecasted needs.

5 Key Action Items You Can Take Now:

1. Set up a simple cash flow tracking system (using software or a basic spreadsheet). Track every cent coming in and going out.

2. Create a 6-month cash flow forecast, including expected income and expenses, and revisit it every month to stay on top of any issues.

3. Talk to your accountant or hire one if you haven’t already. You need expert help keeping your cash flow on track.

4. Negotiate better payment terms with suppliers, or offer discounts to customers who pay early.

5. Set a cash reserve goal—start by saving 10% of your monthly profits until you’ve built up 3-6 months of operating expenses.

If you can master cash flow, you can master your business. Keep the money flowing in the right direction, and your startup will be poised for success.

So, stop guessing. Start managing your cash flow today.

This Week’s Resource

LIVE Webinar: Raising Capital in an AI Age

Join PlanWriters CEO Matthew Khalili, for a LIVE webinar this Wednesday, 8/6 at 1pm ET/ Noon CT / 11am MT / 10 am PT.

In it, you will learn how to raise capital today.

Register Here ←

During the webinar, you’ll learn 

• How to raise funding in the age of AI

• AI-era fundraising trends and investor expectations

• How to stand out from automated pitches

• Building trust through authentic storytelling

• How to craft a pitch that resonates deeply

If you’re currently seeking funding, this webinar is a must-attend!

Register Here ←

Trivia

Question: Which company was the first to mass-produce television sets in 1938?

Answer:
RCA mass-produced the first television sets in 1938.

Business Lesson:
Pioneering in a new technology sector can establish your brand as a leader. RCA’s early entry into the television market helped it shape the home entertainment industry.

Help Other Entrepreneurs & Business Owners

Do you know someone who could benefit from our newsletter?

Please let them know they can sign-up here.