Rich on Paper, Broke on Friday

Cash flow is the timing of money moving in and out, on the days it really moves. Two words carry it: timing and actual. An invoice is a promise. A promise does not make payroll.

Frankie is profitable. He is also nearly out of cash. Those two things are not opposites. In a normal month his trucks sell about 34,000 coins and earn roughly 4,000 in profit. But about 14,000 of those sales are catering and one huge warehouse account that pays 30 to 60 days later. The profit is real. The cash is stuck downstream.

If that sounds familiar, start with what cash flow is and why profit is not cash. The book takes you the rest of the way.

From the book: a normal month at Fire-Baked Pizza (coins)
Sales34,000
Ingredients (about 30%)−10,200
Payroll (paid every two weeks)−11,300
Rent, fuel, loan−5,200
Insurance, utilities, and other−3,300
Monthly profitabout +4,000

Rent 2,500, fuel 1,500, and loan 1,200 are grouped on one line here. Profit says Frankie is fine. The calendar says otherwise.

The Three Things Quietly Draining Cash

None of them shows up on the day it happens. Doctor Owl names all three, then closes them one at a time.

01

The gap between the sale and the coin

You pay for flour, crew, and fuel today. The customer pays you 30 or 45 days from now. You are early on the paying and late on the collecting.

02

The one enormous customer

Wendell the whale orders lunch for his whole crew every week. The best account Frankie has, and the most dangerous one.

03

No cushion when the wave rolls out

Hustle is not a reserve. When a big customer pays late, there is nothing set aside to dip into.

Slow payers are their own lesson: how to get customers to pay on time.

Read the Opening: Where the Money Walked

Doctor Owl follows Frankie back to the den behind the kitchen and watches the coins leave.

Introduction

A Record Month, and an Empty Drawer

“I sold a mountain, and I have got no dough.”

“So where is the money?” Doctor Owl asked. “That,” said Frankie, “is the part that makes no sense. I sold a mountain, and I have got no dough.”

Doctor Owl did not answer right away. He picked up three of the pepperoni-doodle napkins, turned them over, and set them down in a row, the way a doctor lays out symptoms before naming the illness. “You keep asking where the money is,” he said, “as though it were stolen. It was not stolen. It is scattered across time. Some of it left this morning, some of it has not arrived yet, and some of it was never really yours to begin with. Your trouble is not that the coins are gone. It is that no one ever taught you to see them by the calendar instead of by the pile.”

Where did 38,000 coins go, and can Frankie make Friday’s payroll? Doctor Owl lets the trolley leave without him to find out.

Keep Reading on Amazon →

A One-Page Checklist You Tape Where You Count the Money

The book walks Frankie through five steps: find the starting point, build a cash calendar, make one change and one control, measure the result, adjust and repeat. Then it hands you the habit.

Tonight

Thirty minutes, once

Write down your true cash balance and every bill due in the next two weeks. Open a separate reserve account, even with a small first deposit.

This Week

A few small moves

Build one four-week cash calendar. Add a deposit policy to your next quote. Put one control on your cash.

Every Sunday

Twenty minutes, forever

Roll the calendar forward a week. Find the leanest week ahead. Make one change. Feed the reserve.

How big should that reserve be? See how much cash reserve a small business needs.

Questions About the Cash Flow Book

Is Cash Flow Management for Small Businesses a children’s book?
No. It is an adult business finance parable. The characters are Fabled Forest animals, but the problems are real ones: slow-paying customers, one customer who is too big, and no cash cushion. The numbers are in coins, and one coin reads as one dollar.
What is cash flow management for a small business?
Cash flow management is watching the timing of money moving in and out, on the days it actually moves, so a profitable month does not turn into a missed payroll. The book does it with a simple four-week cash calendar you roll forward every Sunday.
How is this different from the budgeting book?
Budgeting for Small Businesses is Book 1. It plans whether a month makes money. Cash Flow Management is Book 2. It shows when that money actually arrives and leaves, and how to close the gap between a sale and the cash.
Which edition of Cash Flow Management for Small Businesses should I read?
Pick the one you will finish. The Fabled Forest edition teaches cash flow through Fast Frankie the fox and his food trucks. The 90-Minute Crash Course is the straight edition: where your cash actually goes, how to forecast it, and how to stop running out of it, with no story.
Is Cash Flow Management for Small Businesses available in paperback?
Not yet. Both editions are Kindle eBooks. There is no paperback edition at this time.

Stop guessing where the money went. Start seeing it by the calendar.

About the Author: Dr. Paul Borosky, DBA, MBA

Business Consultant, Fractional CFO & Author | 14+ Years

Dr. Paul Borosky has built budgets, cash forecasts, and financial projections for more than 1,000 small business clients across the United States and Canada, with more than $100M in funded projects. He holds a DBA and an MBA focused in finance, has taught finance at the college level, and has published over 1,000 business videos on YouTube.

This page is for general educational purposes only. It is not legal, financial, tax, accounting, or lending advice. Tax rules change by place and by year. Fast Frankie, Fire-Baked Pizza, Wendell, and Doctor Owl are fictional composites from the book, and their figures are illustrations, not projections for your business.