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The Cash Flow Mistake That Kills Ohio Businesses
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The Cash Flow Mistake That Kills Ohio Businesses |
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## Content OHIO LOCAL BUSINESS DIGEST
The Silent Business Killer
It is not competition. It is not bad products. It is not lack of customers.
The #1 reason Ohio businesses fail: Cash flow.
You can be profitable and still go bankrupt. Here is why.
The Problem: Profit vs. Cash
You land a $10,000 project. Great!
But: • You buy materials upfront: $4,000 • You pay your team: $3,000 • You wait 60 days to get paid
On paper, you made $3,000 profit.
In reality, you are $7,000 in the hole for 2 months.
Now multiply that by 5 projects. You are $35,000 negative.
You are profitable. And broke.
This is how good businesses die.
3 Cash Flow Rules Every Ohio Business Needs
Rule #1: Get Paid Faster
Options: • 50% deposit upfront (non-negotiable for new clients) • Net 15 instead of Net 30 (offer 2% discount for early payment) • Progress billing (bill milestones, not completion)
Example: $10K project → $5K deposit, $3K at halfway, $2K at completion
Result: You are never more than $3K out of pocket.
Rule #2: Pay Slower (Legally)
Negotiate payment terms with suppliers: • Ask for Net 30 instead of COD • Use business credit cards (30-day float) • Pay invoices on day 29, not day 1
This is not shady. It is smart cash management.
Rule #3: Keep a Cash Reserve
Minimum: 3 months of operating expenses in the bank.
If your monthly expenses are $10,000, keep $30,000 liquid.
Why? Because cash flow gaps WILL happen. Clients pay late. Projects delay. Economy slows.
Cash reserves buy you time. Time buys you survival.
Real Ohio Example: Toledo Contractor
The Situation:
Mike runs a Toledo contracting business. $500K/year revenue. Profitable on paper.
Problem: He was always broke. Maxed credit cards. Could not make payroll twice.
The Fix:
We changed 3 things:
1. 50% deposits - No exceptions 2. Progress billing - Bill every 2 weeks, not at completion 3. Built a reserve - Saved $50K over 6 months
Result:
Same revenue. Same profit. But now he has $75K in the bank. No more stress. No more scrambling.
Cash flow fixed = business fixed.
The Cash Flow Formula
Here is the simple math:
Cash In - Cash Out = Cash Flow
Improve cash flow by: • Increasing Cash In (deposits, faster payments) • Decreasing Cash Out (negotiate terms, delay expenses) • Timing the gap (reserve covers the difference)
It is not rocket science. It is discipline.
Action Step This Week
Look at your outstanding invoices.
How much are you owed right now?
Call your 3 biggest late-payers today. Get paid.
Then implement 50% deposits on all new projects. No exceptions.
Cash is oxygen. Do not run out.
To your success,
Shawn Miller
P.S. Struggling with cash flow? Reply to this email. I will help you fix it. |