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Dealing with Uncertainty: Stretching Cashflow | A Guide

  • Writer: Amy Newton
    Amy Newton
  • Aug 8, 2024
  • 3 min read


A new expert report from Newtons Theory navigates an uncertain financial climate.

We’re facing global financial uncertainty, with rising global trading uncertainty, and potential recession fears on the horizon. It’s no wonder, therefore, that many business owners are finding themselves walking a financial tightrope.


That’s why cashflow strategists, outsourced CFOs, and fractional finance experts, Newtons Theory, have released their expert-led report, “Dealing with Uncertainty: Stretching Cashflow.


The report delivers a thoughtful, strategy-packed roadmap for navigating choppy waters, and in this article, we explore three key themes of the guide, designed to support company executives navigating uncertain times.


Let’s dive right in.



1. Raising Investment Wisely: Plan, Don’t Panic


  • Smart Planning: Investment may feel harder to come by right now, but it isn’t off the table - it just requires smarter planning. The report emphasises the need to make investment a growth choice, not a necessity. Entrepreneurs must stress-test their 18-month cash flow forecasts to evaluate the real need and timing for capital.


  • Research, Research, Research: It’s also important to do your homework: research investors before pitching, ensure your ask matches their criteria, and be realistic about your company’s valuation. With current conditions favouring stronger financial fundamentals, investors are now laser-focused on traction, margins, and profitability. And remember - super-quick funding rounds are the exception, not the rule.


  • Invest in Sustainable Relationships: Finally, building relationships with potential investors early and maintaining ongoing trust is key. If you’re offered a deal, pause and consider: will this dilute too much equity at a low valuation? Are there alternative cashflow strategies to consider first?


2. Be Strategic About Growth: Intentional, Layered, Focused


  • Consider True Cost of Growth: Growth isn’t just about scaling fast; it’s about scaling smart. The report highlights that too many businesses underestimate the true cost of growth, especially in tech. It’s not just development and marketing - there’s also recruitment, admin, customer service, and IT that all stretches resources.


  • Be Intentional: Newtons Theory advises growing in intentional, ambitious stages. Focus only on what’s core to your offering, both in terms of customers and products. Improve gross margins as part of your growth strategy, not just as an afterthought. Operating with lean, flexible models - especially in uncertain times - offers resilience and room to pivot if needed.


  • Don’t Forget: A business plan isn’t just a formality - it’s a decision-making tool. Use it to weigh opportunities, manage risks, and direct operational focus.


3. Mastering Cashflow: Review, Reduce, Reimagine


Managing cashflow is more than just watching the bank balance. It’s about understanding the timing and nature of cash inflows and outflows, and making tactical decisions to stretch every penny.


  • Strategise for Success: Strategies include switching to upfront invoicing, offering discounts for long-term commitments, and reassessing subscriptions and overheads. Every cost, big or small, deserves scrutiny. Negotiate with suppliers, assess the ROI of marketing spend, and consider hybrid or flexible staffing options.


  • Capital Recommendations: Working capital should ideally cover 2-3 months of overhead. If you’re pre-revenue, aim for at least a 6–9-month cash runway. Remember, cash reserves aren’t always “free” - factor in future liabilities and rolling forecasts.


Final Thought


As part of the report, Newton’s Theory founder, Amy Newton, encourages business owners to be cautious when others tell them to “go big”, particularly when it's not their money on the line.

“Entrepreneurs can be highly optimistic and generally have had to push away negative thoughts and negative comments from other people.


As an entrepreneurial-minded CFO, who has built their own business twice, I’ve brought together a team of accountants who are comfortable with calculated risks and the challenges of fast growth”.


To grow in the existing environment, you’ll need to truly foster ideas amongst your team, prioritise open communication, and balance a risk appetite with financial expertise.


Faced with the prospect of stretching cashflow? Assessing the best route through financial upheaval? Explore the report in full here.


Looking for something more hands-on? Discover Newtons Theory, fractional finance expertise for scaling businesses.

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