Effective ways to deal with cash flow problems as a small business founder

Let’s not sugarcoat it: In small business, cash flow is survival. And cash flow issues can make you feel like you’re running a circus on a tightrope with no net. I’ve been there. Once had a month where I stared at the forecast in disbelief and swore my calculator, Excel and my bookkeeper were all very, very wrong. If you’re juggling invoices, payroll and sleepless nights, you’re not alone—and you’re not failing. Welcome to the gritty reality of being a founder.

Here’s how I think about cash flow (after learning the hard way as I built my business over 15 years):

Cash flow isn’t just about making your numbers look good for investors or your accountant. If you don't have money, you don't have a business. A business without cash is just a hobby with stress.

For a small business, it can be the difference between sleeping soundly or tossing and turning over whether you can make payroll. If you’ve been losing sleep over your business financials, I have some tips from someone who’s been there (me) to help you start getting a grip on your cash flow. 

1. You need a 13-week cash flow forecast like you need coffee and oxygen.

I always tell my clients that “proactive cash flow monitoring is essential for business survival,” and it’s not just founder talk, it’s reality. You need to get real about financial forecasting. And you don’t need to be a big business to do this. Start the habit early!

First, figure out exactly when your next cash shortfall could happen. A 13-week cash flow forecast reviewed weekly is my go-to, letting me spot cliffs and minor bumps before they throw me off course. 

When I first heard someone suggest a 13-week forecast, I rolled my eyes and thought, "Cool, another spreadsheet I’ll ignore." Then my payroll number grew to the point that gave me heartburn, and that spreadsheet became my antacid.

Set up a simple rolling forecast. Look at what’s actually booked (not just promised or likely) and update it weekly. I do this with every client. Every. Single. Week. Not just when things look dire. Having a clear and accurate view of your cash flow forecast will help you base your decisions on booked revenue, not optimism or hypothetical income.

2. More scale always means more unpredictability

Growth is exciting... and chaotic. You go from one client to 15, from net-30 invoices to net-whenever-we-feel-like-it. I have had huge corporations take months to pay and businesses without streamlined processes send us on an AP Merry-Go-Round to get paid.

Here’s a crazy (and true) founder story: A couple years in, we had a client freak out after we’d completed a huge project. He'd scoped it, approved it, cheered us on... and then suddenly realized he didn’t actually have the authority to approve the spend. 

Meanwhile, we’d already racked up hours and owed our (mostly contractor) team real money. So what did I do? I figured out how to accept credit cards—on the fly, back when that was still a headache—and he paid us on his personal card. 

It was a mess, but it taught us (and him) something important: we did damn good work, and we stood our ground. And professionals honor their promises. That moment built real trust with our team. And yes, we never skipped contract clauses around approvals again.

The more you grow, the less control you have over who pays, when, and how quickly you can recover from hiccups. Accept it, plan for it, and build in buffers. Control is truly an illusion. You will not realize how little control you have until you are a parent and a business owner. But with cash flow planning and monitoring, you increase your chances of staying in the green.

3. Set your base operating expenses based on your lowest-cash scenario, not your one-hit-wonders.

Here’s the trap: We hit a few peak months and suddenly think that’s the new normal. Don’t do it! Set your base operating expenses based on your lower cash flow projections, not your most optimistic. This will help you save excess money and avoid making fixed commitments during flush periods that could become unsustainable during revenue droughts. Do an expense audit like your business depends on it. Because it does. 

When things do go sideways (and they will), don’t haphazardly slash expenses. Use a systematic approach to review and cut unnecessary expenses and overhead costs. It’s a good exercise in being disciplined about needs vs wants.

• Cancel unused software seats for former employees. I’ve seen the subscriptions line item drop by 50% when we really dig into unused software tools and subscriptions!

• Pick one video conferencing tool. If you’re using (and PAYING for) Zoom and Meet, just... stop.

Schedule quarterly reviews. I block 30 mins every 6 months with my ops person and we get ruthless. Then grab your controller and go through every line item with “do we really need this?”
Ask: "Do we really need this or did someone read about it on LinkedIn?"

4. Cut underperforming team members (yes, really).

Nobody likes to talk about this. Honest to God, it’s the hardest part of the job. But if you’ve got someone who’s coasting, dragging the team and cash flow is tight? Oh, founder, it's time. I’ve had to make that call, and it sucks.

5. Be paranoid about recurring costs.

If your revenue is inconsistent or you have zero recurring contracts, treat every fixed cost like it has a warning label. That fancy new retainer or office space might look cool—but is it worth losing sleep over when things get slow?

Good cash flow planning and foresight helps ensure you have that cash reserved for a rainy day, or better yet, for smart investments in the future that will help the business grow.

6. Build cash reserves—and don’t touch them unless it’s raining.

The first time I hit six figures in monthly revenue, I thought I’d made it. Then came a dry quarter. Now, every time there’s extra, I stash it in a money market account (PLEASE earn interest on these funds) like I’m preparing for a zombie apocalypse. No regrets. Also does wonders for sleep.

7. Use credit strategically, not desperately.

Move automatic debits to credit cards if you need a 30-day buffer. This isn't a long-term strategy, it’s just a life raft. Pay it off every month like a good founder.

8. Cutting costs only buys you time. Selling buys you survival.

We once learned we were unexpectedly losing our largest client in 90 days due to a new leader who wanted offshoring and insourcing. Brutal. It was a gut punch that could have taken us out.

So instead of waiting for the slow bleed, we halved their clock. We gave ourselves 45 days to replace that revenue and extend our cash runway as far as possible. We pulled everyone into a room, covered the whiteboards, and built a 45-day plan. 

Every single person in the agency had a role: contacting past and current clients, following up on old proposals, calling every colleague we could think of. We even spun up a Slack channel called #45-Day-Plan where every lead, every win, every ounce of energy was dedicated.

And it worked. We replaced the short-term revenue within those 45 days. The momentum was insane, the team was electric, and we didn’t have to let a single person go. Honestly, it made us sharper, faster, and better than before.

That experience cemented this truth for me: you can only cut so much. At some point, the only move is to sell like your business depends on it—because it does.

Remember: You're not alone. Cash flow issues hit everyone, even the founders you admire most. The ones who survive? They don’t just cut—they sell, and fast. Set your 13-week forecast, keep it real, and when in doubt, go make money. And if you need to cry into a spreadsheet now and then? Totally normal.