Keep the Lights On: Cash Flow Management for Startups

Today’s chosen theme: Cash Flow Management for Startups. Learn how to stretch every dollar, avoid surprise shortfalls, and turn cash into a strategic advantage. Subscribe and share your experience—your story could help another founder make payroll on time.

Runway, Burn, and the Moment of Truth

Calculating Burn Rate the Right Way

Track average monthly net cash outflow using real bank transactions, not just plans. Separate operating, investing, and financing cash to see what truly sustains your business. Share your method and compare notes with peers to sharpen your numbers.

Runway as Your Decision Clock

Translate your cash balance into months of runway under multiple scenarios. Use this as a decision clock for hiring, marketing bets, and product scope. Comment with how you align major milestones to your runway checkpoints.

An Anecdote from the Edge

A founder once discovered an extra six weeks of runway by renegotiating payment terms and pausing nonessential experiments. That window saved a major customer launch. Tell us what small cash moves created outsized breathing room for you.

Build a 13-Week Cash Flow Forecast

List expected customer receipts by week based on invoice dates and realistic collection timing. Map payroll, rent, tools, and taxes to exact weeks. This calendarized view exposes crunch points early. Share your favorite template and why it works.

Send invoices immediately upon milestone completion with clear descriptions, payment options, and due dates. Enable ACH and automated reminders. A reader once shaved nine days off collections by simplifying line items. What micro-adjustment helped you the most?

Control Outflows: Terms, Priorities, and Momentum

Ask for net-30 or net-45 terms after a positive trial period. Propose automated payments to ease vendor risk. One founder gained net-60 by sharing transparent cash projections. How have you earned goodwill that translated into better terms?

Control Outflows: Terms, Priorities, and Momentum

Rank expenses by direct impact on revenue, retention, or regulatory compliance. Pause tool creep and duplicate subscriptions. Revisit annual contracts before they auto-renew. Comment with your monthly ritual for pruning costs without slowing the team.

Scenario Planning: Prepare Without Paralysis

Define clear thresholds for actions, such as cutting discretionary spend at eight months runway or freezing hiring at six. Pre-communicate these rules to your leadership team. What triggers do you monitor weekly to stay ahead of surprises?

Scenario Planning: Prepare Without Paralysis

Model the impact of a top customer paying late or churning. Identify countermeasures like bridge receivables financing or accelerated prospect outreach. Share how you reduce concentration risk while maintaining excellent service.

Lines of Credit and Revenue-Based Financing

Explore flexible options tied to receivables or revenue streams. Compare covenants, fees, and draw timing. Use financing to smooth timing gaps rather than fund permanent burn. Share any lender evaluation checklist you trust.

Customer Financing and Co-Development

Invite strategic customers to prepay or co-fund features that serve them. Align timelines, deliverables, and acceptance criteria. This turns demand into cash before costs hit. Tell us when customer-backed development moved your roadmap forward responsibly.

Cash Reserves and Sweep Accounts

Keep a modest reserve for emergencies and use sweep accounts to maximize safety across insured limits. Establish authorization rules for transfers. Comment with how you balance accessibility of funds and risk diversification.

Metrics That Matter for Cash Discipline

Cash Conversion Cycle, DSO, and DPO

Measure how quickly cash returns after being spent. Shorter cycles mean resilience. Improve DSO with better invoicing and DPO through respectful term negotiations. Share your proudest improvement and what operational change made it possible.

Unit Economics in Cash Terms

Focus on gross margin dollars and payback period in weeks, not just percentages. Tie acquisition spend to actual cash collected cohorts. Comment with your most revealing cohort analysis that reshaped spending decisions.

Operational Quick Ratio for Startups

Compare new cash inflows from customers to cash outflows for growth and operations. Ratios above one suggest healthy momentum. Ask your team to forecast this monthly and discuss how it changes your confidence.

Make Cash a Team Sport

Share simple dashboards and explain the why behind numbers during all-hands. Stories stick better than spreadsheets. Invite questions weekly. How do you make cash conversations safe and constructive rather than scary?

Make Cash a Team Sport

Create light approval workflows with spending thresholds, preferred vendors, and evaluation criteria. The goal is faster decisions with fewer leaks. Post your playbook template and help another founder avoid common traps.