It’s SHOCKING that people with cash problems aren’t doing this simple thing.

A lot of people and businesses have cash flow problems.??

In business, it’s almost always a closely held secret.? For good reason.

Before I get to the point and tell you the first step to take, let me set the stage here.

The last time I had a difficult cash situation was when I first started my business and had only about $3k in the bank and a couple credit cards.? Fortunately I squeaked through that phase and started taking names from then on.? (I know this isn’t the norm in business, and I’m grateful)

But at that initial point of teetering and wondering if I had enough runway….would I ever have considered being open about my cash position?? Absolutely not.? I can’t think of a worse marketing message!??

Yet in our personal lives, people go around bragging publicly about how they are finally getting their act together and going to Dave Ramsey or cutting expenses or taking a second job or whatever.? I think this is great, as it holds people accountable by publicly putting it out there, even if most seem to stay stuck anyways.

But if you are running a business, confiding in someone about cashflow issues is almost exclusively reserved for your closest advisors.??

Thing is, it’s not even something to be embarrassed about.? Because I’m here to tell you, it’s the majority.

I’ve had unique access to a LOT of businesses over the last 15 years of consulting and training work that I’ve done.? I started as an outsourced CFO, so I had a lot of these conversations via that business.? And then through LinkedSelling and Connect 365, we had thousands of customers, businesses of all sizes.? At the same time, I’ve been part of a lot of business groups including EO.? And I worked in my Dad’s business as a teenager, so really I’ve been seeing case studies in cash issues for 25 years.

Through all of these experiences, in business groups, and working with many many clients, I’ve easily come to this conclusion.? It’s not even a question.? The majority of businesses are doing the balancing act with cash and not in a super comfortable position.??

It makes sense that this is the case.? Because after all, we’ve all seen the stats on how many businesses succeed.? I’m not gonna look it up right now, but it’s something like 50% fail in the first five years.? I have heard before that only 1 in 10 make it.? Who knows what the real number is, but we all know it’s hard out there and getting harder.??

And most people don’t think about this, but a LOT of businesses with cash flow struggles are actually doing quite well.? They are just growing quickly.? Fast growth chews up cash.? This is why growing companies often have to use a line of credit to finance this growth. That person you see on the rocket ship…they might be cash poor.

So let’s get down to it.

Here’s what’s actually befuddling to me.

In the countless conversations and consultations I have had with people who are worried about cash in their business, losing sleep over whether they’ll meet the next payroll, feeling like they can’t go on vacation if things don’t improve, etc, etc….

…I sometimes ask the question “Have you created a cash flow forecast?”

I’m not even playing around, I can’t think of a single time that somebody said yes.??

Not a single time that somebody came back to me with a spreadsheet that had any semblance to an even rudimentary version of a cash flow forecast.??

This is the first step guys.??

I usually recommend a 13 week cash flow forecast.? That’s roughly 3 months. (But if that seems like too much work, just do 4 weeks.)

For the 13 week forecast, build a spreadsheet with 13 columns, one for each week.? Create rows for all of your anticipated inflows and outflows.? Total it at the bottom, and have a row to adjust your ending bank balance for each week.?

Is there a problem on the horizon?? Now you can see it and think about solving it ahead of time.??

Are things actually looking up?? Now you can sleep easier and quit trippin, because you can actually see light at the end of the tunnel.

Even when I have plenty of cash in the bank, I still do this if I ever start feeling a little anxiety about things moving in the wrong direction.? I don’t like seeing cash decline at all, so I always want to double check that it’s a temporary dip.??

It provides a lot of peace of mind.

Hope this helps.? Whether you need it now or may some day in the future.

But I know from experience, very few will actually do it.

Except maybe those businesses who are excelling.? They are usually the ones doing all the right things.? Isn’t that something?

P.S. I will be doing some deep dives on stuff like this for people who want to be a part of my Blueprint group that I am going to kick off next month.? Most of what we’ll be doing is focused on growth/marketing strategies.? But I know most people need this kind of “cfo” advice too…and oftentimes when you need it most you feel like you can’t justify the expense, so I hope to provide a bit of a stop-gap in that area and give you some of the basics.? The 80/20, if you will.

P.P.S. Soon I hope to be announcing something that I think will be sweet. I am launching a weekly business show but it’s different from any other business shows.? It’s not interviews. It will not suck, as I believe most/all business shows (and podcasts) do.? We’re gonna do our first show soon, but like a dry-run, so you might get to see us mess up and figure it out as we go.? I’ll keep you posted.

Also in case you want to get caught up, here are my most recent pieces of content that some people are calling straight heaters:

My comeback announcement

Setting rules so that your business works for you

Talk to you soon!

Josh