What It Takes to Scale Up a Business (Part 4) — Having Enough Cash to Weather the Storms

“Never take your eyes off the cash flow because it’s the lifeblood of business.” — Sir Richard Branson

Growth is exciting — but it’s also expensive.

For every dollar of new revenue, cash leaves your business long before it comes back. Salaries, marketing, inventory, rent, and tax all come due before your customers pay their invoices.

That’s why cash — not profit — is the ultimate fuel for scale.

Without it, your business can stall just as the climb gets steep.

This is the fourth and final part of our Scaling Up series, where we look at how to strengthen your cash position so you can fund growth, stay resilient, and weather any storm.

Why Cash Flow Is the Oxygen of Business

Cash flow is the movement of money in and out of your business.
It’s the most immediate measure of your company’s health.

When it’s strong, you can invest, hire, and grow.
When it’s weak, even a profitable business can choke.

That’s why, in Scaling Up, Cash sits alongside People, Strategy, and Execution as one of the Four Decisions every leader must master.

Verne Harnish says it best:

“Growth sucks cash.”

If you’re not managing your cash flow deliberately, growth can quietly drain your oxygen supply.

Step 1: Understand Your Cash Conversion Cycle (CCC)

Start by measuring how long it takes between spending a dollar and getting that dollar back.

This is your Cash Conversion Cycle (CCC) — a simple but powerful metric that reveals how efficiently cash flows through your business.

Track these three elements:

• Receivables: How quickly you collect payment.
• Inventory (or Work-in-Progress): How long cash is tied up in production.
• Payables: How effectively you manage supplier payments.

The shorter your cycle, the more cash you generate without borrowing or raising capital.

Every improvement you make here compounds — and directly impacts your ability to scale.

Step 2: Make Your Leadership Team Financially Literate

You can’t manage what you don’t understand.

Ensure your leadership team knows how to read and interpret:

• Profit & Loss statements
• Balance Sheets
• Aged Debtors and Creditors
• Cash Flow Statements

Assign ownership of line items to team members — so someone is accountable for every key metric.

When leaders understand how the business makes money (and where it leaks cash), they make smarter, faster decisions.

Step 3: Master “The Power of One”

One of the most powerful tools in Scaling Up is the Power of One.

It asks a simple question:

“What if we improved seven key financial drivers by just 1%?”

Those drivers include:

• Price
• Volume
• Cost of goods sold
• Overheads
• Accounts receivable
• Inventory
• Accounts payable

Even small improvements can deliver up to 100% increases in profit or cash flow.

The Power of One gives you clarity, focus, and control — the antidote to reactive cash management.

Step 3: Review Your Pricing Strategy

Pricing is often an overlooked cash lever — yet it has the greatest impact on profitability.

A 1% increase in price can produce up to a 10% improvement in profit.

Ask:

• How do customers perceive our value?
• Are we charging for the full value we deliver?
• Do we discount too often or too quickly?

Remember: to offset a 1% price discount, you might need a 3% increase in volume — a much harder target to hit.

Your pricing strategy should be as deliberate as your sales strategy.

Step 4: Build “Oxygen Tanks” — Financial Resilience for Tough Times

Even well-managed businesses face shocks — economic slowdowns, interest rate rises, or unexpected delays.

Prepare for volatility by:

• Building a cash buffer or reserve fund
• Maintaining access to credit lines or funding
• Diversifying revenue streams
• Reducing dependency on one customer or market

As Michael Dell once said:

“It was as if we were driving along watching only the speedometer, when in fact we were running out of gas.”

Cash flow visibility is your early warning system. Don’t wait for the tank to hit empty.

Final Thought — Cash Buys Time, Options, and Peace of Mind

Profit is an opinion. Cash is a fact.

When you control your cash, you control your destiny.
You can invest, innovate, and grow from a position of strength — not survival.

Want to understand your cash position more clearly?
We use a comprehensive Financial Analysis Tool that highlights key levers — Profitability, Working Capital, Funding for Growth, Sustainable Growth Rate, Business Value, and Power of One.

TED BONEL, SCALING UP PRACTITIONER – STRATEGY & EXECUTION BUSINESS ADVISORS

Are you looking to scale your business and execute strategy with clarity and impact? I help CEOs and founders turn big ideas into real-world results, guiding small to mid-market companies through tailored strategic insights that drive growth.

My expertise lies in simplifying complexity – bridging high-level strategic frameworks with the practical realities of running a business. Unlike many consultants who focus solely on theory or execution, I specialise in both—translating strategy into actionable, transformative steps that deliver lasting results.

Want to understand your cash position more clearly?

Contact me at tedb@strategyandexecution.com.au to schedule a free 30-minute discovery meeting.

ABOUT STRATEGY & EXECUTION

For over 20 years, Strategy & Execution has supported leaders and organisations in developing and executing winning strategies. We provide expert facilitation, executive education, and hands-on consulting to help businesses refine their strategic direction and implement it effectively.

Using proven methodologies like Scaling Up, E-Myth Mastery, Outthinker, and more, we challenge conventional thinking and equip organisations with the tools to accelerate growth. Our approach is dynamic—combining deep business experience with practical execution. We don’t just advise; we roll up our sleeves and work alongside you to make strategy happen.

If you’re preparing for a strategy development or execution challenge and are committed to creating real value, we’d love to hear from you. Learn more about our work or upcoming workshops