Bill Gallagher walks through how a fast-growing company nearly collapsed from cash crises despite strong revenue. They fixed it with weekly rolling cash flow projections, starting at 13 weeks and expanding to a full year. Update weekly until cash stops surprising you.
Do you find yourself suddenly in a crisis or maybe you're regularly in a crisis and running from crisis to crisis is one of the ways that you've run and operated as a business leader? Well, if this is you, one of the most common ones that we see people dealing with is cash. Now one of the companies that we coached in the past was doing some really great job growing. They went from a very small amount through 4, almost 5x in a couple of year period. And the demands on the cash and the funding of the business got really serious, except it wasn't a public conversation. Now they knew their project level profit position and they were always working to improve that. And they knew the company level income, right, the income statement, the profit and loss and also the balance sheet on a pretty good regular basis. They had decent reporting, but they didn't have a cash flow flow report. So we got them to do a 13 week and then expanded that out to a 26 week cash flow report. And then eventually we got it to a one year rolling cash flow model where they could look 52 weeks out, not at month by month, but week by week, what were they expecting to bring in? And they would true that up each week. So now they had better visibility to what it was going to take to get out of trouble and stay out of trouble. And, and when they sold new contracts, they went into this model and now they were in far less trouble. So this is the thing that we notice again and again. You probably have some decent, I mean maybe your numbers are a little bit off or a little bit late, but you're probably paying a lot of attention to the profit and loss or the income statement and you probably look at your balance sheet less often, maybe once a quarter and some people only once a year. The key thing that you want to be looking at every single week is the cash flow statement. Until you've got really predictable customer funded business with easy fundability, you want to be looking at a cash flow projection rolling out at least 13 weeks. So that's the tool that we recommend is implementing a cash flow projection. A model that you update every single week. And that'll make an enormous difference to your peace of mind and the chance to deal with things before they become true crises that bite you in the butt. We've got loads of tools like these and others and lots of low cost options to help you grow and scale your business to navigate any economic cycle. The things that we do and work with companies to help them get growing, work in both up markets and down markets. In any industry in any part of the world. If you'd like to see these and many more, go to scalingcoach.com scalingcoach.com For a world of free tools and downloads.
