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Key Takeaways

A shrinking bank balance is a symptom, not the disease, so figure out what’s causing it before you try to fix it.

Financing can buy you time, but it can’t repair a broken pricing model, bloated overhead or slow collections.

A few months after I started working with an entrepreneur I’ll call Virginia, I discovered something in her financials that stopped me cold. Her company had been operating for four years, and during that entire time, it had never generated positive operating cash flow .

Virginia didn’t seem to know that until I told her. The business had been borrowing money to keep itself running, and by the time I came in, the balance sheet was carrying significant debt. Then the pressure got worse. Within six months, the company lost roughly $750,000 in corporate sponsorship as funding for diversity, equity and inclusion initiatives dried up.

From the outside, you could have called this a cash flow problem .…