First: Don't Panic

Tight cash flow is stressful, but panic leads to bad decisions. Take a deep breath, assess the situation honestly, and create a plan. Most cash flow problems are solvable if you act quickly and strategically.

Immediate Actions (Days 1-3)

1. Accelerate Cash Collections

Call every customer with an overdue invoice—today
Offer a small discount (2-5%) for immediate payment
Request partial payments on large invoices
Consider invoice factoring for immediate cash (if necessary)

2. Defer Non-Essential Expenses

Delay non-critical vendor payments (with communication)
Pause non-essential subscriptions
Defer equipment purchases or upgrades
Postpone marketing campaigns that don't have immediate ROI

3. Communicate with Vendors

Don't ghost vendors. Call them, explain the situation, and propose a payment plan. Most vendors prefer partial payments over no payments, and they'll work with you if you're transparent.

Short-Term Solutions (Days 4-14)

1. Secure Short-Term Financing

Line of credit (if you have one)
Business credit card (for specific expenses)
Invoice financing or factoring
Short-term business loan

Warning: Only use financing if you have a clear plan to repay it. Don't use debt to fund ongoing losses.

2. Cut Costs Immediately

Review every expense line item
Cancel unused subscriptions or services
Renegotiate contracts (internet, phone, software)
Reduce discretionary spending

3. Increase Revenue Quickly

Offer limited-time discounts to generate immediate sales
Reach out to past customers with special offers
Sell unused inventory or equipment
Offer payment plans to close deals faster

Medium-Term Fixes (Weeks 3-8)

1. Fix the Root Cause

Tight cash flow is usually a symptom, not the disease. Common root causes:

Pricing too low (not enough margin)
Slow collections (customers paying late)
Growing too fast (cash can't keep up with growth)
Seasonal fluctuations (not planning for slow periods)
High fixed costs (not enough flexibility)

2. Improve Cash Flow Management

Implement weekly cash flow reviews
Create a 30-day rolling forecast
Set up automatic payment reminders
Negotiate better payment terms with vendors
Require deposits or progress payments

When to Seek Professional Help

Consider professional help if:

You can't cover payroll in the next 30 days
You're considering personal bankruptcy
You have more than 90 days of overdue payables
You're using personal assets to fund the business

Prevention: Build a Cash Reserve

Once you're through this crisis, build a cash reserve equal to 3-6 months of expenses. This buffer prevents future cash flow crises and gives you peace of mind.

The Bottom Line

Tight cash flow is survivable, but it requires immediate action, honest assessment, and strategic thinking. The businesses that survive are the ones that act quickly, communicate transparently, and fix the underlying problems—not just the symptoms.

What to Do When Cash Flow Gets Tight: A Survival Guide