Cash Flow Beats Margin

Project businesses share one weakness: no money when busy, less money when idle. The books look healthy, but salaries are monthly, suppliers want terms, and clients pay after acceptance.

The quarter we learned from

We once ran four projects at once and grew to twelve people. Work was moving, but every acceptance landed in December and three months of payroll came out of pocket.

Since then, every new project is judged on two numbers before kickoff: the deposit ratio and the payment milestones.

Three rules we keep

Thirty percent on signing, forty at mid-term acceptance, thirty at final acceptance. The split is negotiable; a zero deposit is not.

A monthly cash forecast separates invoiced-but-unpaid from accepted-but-uninvoiced, and any item past thirty days belongs to an owner.

Three months of fixed costs stay in the account, no matter how large an order looks.

Margin decides how far the company can go. Cash flow decides whether it gets to tomorrow.