Managing Cashflow in Turbulent Times

A few weeks ago, I met a friend for coffee at our favourite local bookstore café. It’s not flashy or trendy, just a cosy spot where you can enjoy good conversation, the best coffee, and the faint hum of pages turning. I know you are all groaning and thinking how old fashioned I am, actually preferring books to kindle versions.  But I do and I’m proud of it!  This place is almost my second home.  I have been coming there for years and count the owner as a friend. 

As we settled into our table by the window, I couldn’t help but notice the owner bustling around, greeting customers, taking orders, and making sure everything was running smoothly. The place was alive with energy, but beneath it, I sensed a hint of strain. 

Eventually, the owner found a moment to catch her breath, and stopped at our table to catch up with me.  “It’s been busy today,” I remarked. She smiled warmly but admitted, “It’s been touch-and-go lately — cashflow’s been a bit of a juggle. We’re just taking it one day at a time.”

That conversation stuck with me. Here was a passionate entrepreneur, pouring her heart into her business, but navigating a financial tightrope—a situation many small business owners know all too well.

It’s easy to overlook cashflow when things feel stable, but during turbulent times, it becomes the lifeblood of your business. Without it, even the most promising ventures can find themselves struggling to stay afloat. So today, I want to share some insights on how you can manage cashflow effectively, even when the economic waters get choppy.

Why is Cashlow so important?

When the economy tightens or you are just starting out it is easy to focus solely on sales and expenses - and they are both important.  The most important thing though is when those sales and expenses are going to hit your bank account.

There is no point in making a $50,000 sale if the money will not be banked for four months and you’re due to run out of money in three months.  You cannot spend a sale before you bank it because until it is in your bank account a sale is not a sale it is a gift.

Imagine you’re on a road trip, and your fuel gauge is broken. You might be driving full speed ahead, confident you’ll reach your destination, only to find yourself stranded on the side of the road. That’s what it’s like to run a business without keeping a close eye on your cashflow

Switching the analogy to airplanes, many businesses measure the length of their runway as the number of months they have money left to operate for.  Knowing the length of your runway is always important but it becomes THE most important measure in turbulent times.

The Hidden Costs of Neglecting Cashflow

A lack of cashflow visibility can lead to:

1. Missed opportunities to invest in growth.
2. Late payments to suppliers, straining relationships.
3. Stressful conversations with employees about delayed payroll.
4. Ultimately the demise of your business.
5. 
   

The café owner I spoke with had learned this the hard way during a particularly quiet season. “We’d always been busy enough that I didn’t think much about the numbers,” she confessed. “But then sales dipped unexpectedly, and I realised I didn’t have a clear picture of where the money was going.”

She was forced to dip into her savings, which was a wake-up call. “I knew I had to start managing my cashflow differently.”

Actionable Steps to Take Control of Your Cashflow

Managing cashflow doesn’t have to be overwhelming. It is just estimating what will come into and leave your bank account.

Here are some steps you can implement immediately:

1. Track Your Inflows and Outflows Start by reviewing your last six months of financial activity. How much money is coming in? What’s going out? Look for patterns—seasonal dips, unnecessary expenses, or overdue invoices.
2. Create a Cashflow Forecast A simple forecast can be a game-changer. Map out your expected income and expenses for the next six to twelve months. This helps you anticipate shortfalls and plan accordingly.
3. Revisit Payment Terms If you’re waiting 60 days for clients to pay, but your bills are due in 30, you’ve got a mismatch. Talk to clients about shortening payment terms or consider offering small discounts for early payments.
4. Save for Tax superannuation and any other statutory payments by putting the money into a separate account as it is incurred.  Then it will be ready for payment when it is due.
5. Build a Safety Net Aim to set aside three months’ worth of operating expenses. It’s not always easy, but even small, consistent contributions to an emergency fund can add up over time.
6. Seek Professional Guidance If managing cashflow feels like a foreign language, you’re not alone. Working with a financial expert can help you untangle the complexities and put a solid plan in place.

The Payoff of Getting It Right

After implementing a few of these changes, the café owner told me, “It’s not perfect yet, but I finally feel like I can breathe. I know where we stand, and I’m not just hoping things will work out.” She also discovered unexpected opportunities—like renegotiating supplier contracts—that improved her margins.

Managing cashflow doesn’t just help your business survive—it creates space for it to thrive. It gives you the confidence to make decisions, the ability to seize new opportunities, and the resilience to weather the storms.

Your Next Step

What’s one thing you can do today to strengthen your cashflow? Maybe it’s setting up a simple tracking system, having a conversation with your accountant, or cutting back on non-essential expenses.

Managing cashflow may not sound glamorous, but it’s the foundation that supports your dreams. And remember, you’re not alone in this. If you’re feeling stuck, we’re here to help.

Let us show you how Foundational Cashflow can partner with you to create financial systems that give you clarity and peace of mind.