Navigating Business Owner Cash Flows

Reducing Cash Flow Challenges for Emma’s Capital-Intensive Business

The Story

Emma is a successful entrepreneur whose financial journey presented a unique challenge. Her business’s cash flows fluctuated considerably over time, making it challenging to align them with her personal priorities. Frustration had set in, as she found herself postponing several significant life goals. 

Emma’s financial records painted a vivid picture of her struggles. Her business operated on a project basis, often running 3-4 projects simultaneously. Some of these projects extended over two years, requiring substantial capital investments until completion. Consequently, Emma couldn’t predict when her income would arrive, and a significant portion of it was already allocated for tax payments or reinvested in future projects. This left her unable to pursue her family’s top priorities, such as acquiring a ski home or embarking on major vacations. Emma constantly felt cash-strapped and worried about meeting unexpected financial demands, from tax bills to home renovations. 

As we began working with Emma, we requested an introduction to the business’s director of finance, streamlining the process of acquiring accurate project delivery dates and financial projections. We developed a multi-year cash flow and cash needs forecasting tool that integrated every project, business owner benefits, and both business and personal requirements. This tool offered Emma a consolidated view of factors impacting her cash needs, enabling informed conversations and better decision-making. If Emma planned to purchase a ski home in a year, we could evaluate her cash availability, establish a budget, and explore financing options.

Additionally, we guided Emma’s transition to a specialized CPA who understood her industry. This CPA effectively tracked in-process project work, improving the accuracy of tax liability forecasts and offering insights into income recognition and project initiation timing. The enhanced tax estimate data complemented our cash and cash flow modeling.

With our support, Emma’s family could finally move forward with projects that had been on hold for far too long. This included a meaningful charitable endeavor with her alma mater, purchasing a new mountain condo, her spouse launched a new business venture, and they have a vacation account to support the extensive travel plans for the years ahead, ensuring unforgettable experiences for them and their children before they graduated from high school.