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Recipe

Cash flow design

Structure your revenue streams and expense cadence so you never run out of runway. This recipe covers forecasting, buffer sizing, and the signals that tell you it's time to raise or cut.

01

Map inflows

List every revenue source with its cadence — monthly subs, annual contracts, one-time sales. Tag each by reliability tier.

02

Categorize outflows

Split fixed costs (payroll, rent, SaaS) from variable (ads, contractors). Identify what stops if you hit the kill switch.

03

Set thresholds

Define green (>12 months), yellow (6–12), and red (<6) zones. Wire alerts when you cross a boundary.

Key metrics to track

  • Net burn — total outflows minus total inflows per month
  • Runway months — cash on hand divided by net burn
  • Burn multiple — net burn divided by net new ARR added that month
  • Zero-cash date — the exact date your balance hits zero at current burn

Pro tip: Update your zero-cash date every Friday. If it moves closer by more than two weeks in a single month, freeze all non-essential spend until you understand why.

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