Project cash flow over time, analyze cash runway, and plan for business growth. Free cash flow calculator for small businesses.
Project cash flow over time, analyze cash runway, and plan for business growth. Free cash flow calculator for small businesses.
Generated: 1/13/2026, 3:30:16 AM | AskSMB.io
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Cash flow is the total amount of money moving in and out of your business. It's different from profit because it tracks actual cash transactions, not accounting entries. You can have sales that count as revenue but haven't been paid yet, or expenses you've paid upfront before they're fully used. Cash flow tells you if you have enough money to operate.
Profit is revenue minus expenses on paper (accrual basis). Cash flow is actual cash received minus cash paid (cash basis). You can be profitable but cash-poor if customers haven't paid invoices. You can have negative profit but positive cash flow if you collected prepayments. Cash flow determines if you can pay bills today; profit measures long-term financial health.
Cash flow is the #1 reason small businesses fail. You can have a profitable business model but run out of cash before realizing those profits. Employees, rent, and suppliers require immediate cash payment regardless of your profit margins. Managing cash flow means ensuring you have enough liquidity to meet obligations while pursuing growth. It's the difference between survival and closure.
Focus on the trend, not just the numbers. Is your cash balance growing, stable, or declining? Identify when cash dips below safe levels. Look for patterns - seasonal businesses have predictable cash cycles. Compare projected vs actual monthly to improve accuracy. Watch the cash runway if you're in negative flow - this tells you how much time you have to fix the problem before running out of money.
Speed up cash inflows: invoice immediately, offer early payment discounts, require deposits, reduce payment terms. Slow down cash outflows: negotiate longer payment terms with suppliers, delay non-critical purchases, lease instead of buy. Structural improvements: reduce inventory, eliminate unprofitable products, increase prices, improve collections processes. In emergencies: use a line of credit, factor invoices, or seek investment.
Where:
Net monthly cash flow = $6,000 - $5,000 = $1,000 | Ending balance = $10,000 + ($1,000 × 12) = $22,000