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Join for freePosted: Tue 14th Jul 2026
In this Lunch and Learn, financial adviser Jay Maniar explores practical ways for businesses to manage cash flow, keep avoidable costs down and plan for seasonal or unexpected changes.
Learn when funding makes sense, what lenders look for, what government grants are available and where to find practical resources that will help you take the next step.
Why profit and cash flow aren't the same thing, and how growth can create cash pressure before stability
How to identify avoidable costs, contract risks and seasonal pressures before they become urgent financial problems
When funding makes sense, what lenders typically look for and what practical steps to take before applying for finance or grants
Jay Maniar is a strategic financial adviser, a business mentor and the founder of Signals CFO.
He helps founder-led businesses understand what their numbers are really showing them, where cash and profit are being lost and which decisions are most likely to improve performance.
Jay has over 25 years' experience across finance, business strategy and commercial decision-making, including a background with KPMG.
He's mentored more than 120 founders and business owners through programmes including the Help to Grow: Management Course and was a finalist at the National Mentoring Awards.
His work focuses on helping business owners move beyond basic financial reporting, using cash flow, cost behaviour and decision patterns to support more sustainable growth.
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Lightly edited for clarity.
Caitriona: Hello, everyone. Welcome to today's Powering Local Businesses Lunch and Learn. My name is Caitriona, and I'll be your host today.
Powering Local Businesses is brought to you by EDF Small Business and Enterprise Nation, and supported by Square. It's designed to help small businesses grow more sustainably, however you sell and wherever you're based.
Through the hub, you can access energy-saving guidance, expert workshops and a range of free business support services. We'll be dropping links in the chat throughout, so please keep an eye out.
Today, we are focusing on something that sits at the heart of every business: managing your finances for sustainable growth.
Whether you're struggling with cash flow, unsure when to seek funding or trying to get a handle on your costs, this session is for you.
We are joined by Jay Maniar, a strategic finance adviser, business mentor and founder of Signal CFO. Jay has over 25 years' experience across finance, business strategy and commercial decision-making, including a background with KPMG.
He's mentored more than 120 founders and business owners, and his work focuses on helping businesses move beyond basic financial reporting to build more sustainable growth.
In this session, Jay will cover the difference between profit and cash flow, how to identify and reduce avoidable costs, and when and how to approach funding and grants.
Please add any questions to the Q&A as we go. This session is being recorded, and we will share the recording and resources afterwards. Over to you, Jay.
Jay: Thank you, Caitriona. Good afternoon, everyone. The session is really about how to grow without running out of cash, capacity or options.
What I find is that most business owners assume growth will solve their financial problems. More customers, more revenue, more profit.
But growth often creates more financial pressure before it creates financial strength.
So today, I want to show you how to spot some of those pressures early and make better financial decisions before growth becomes expensive.
There are three key takeaways.
First, understand that profit and cash flow are not the same thing.
Second, understand that growth can create pressure before it creates stability.
Third, learn how to identify avoidable costs and know when funding actually makes sense.
The uncomfortable truth about growth is that growth can actually break a business before it improves it.
As business owners, we put out marketing campaigns. We put a lot of effort into getting customer interest, leads and what have you.
I don't know about you, but sometimes I look at the negative. Will someone click? Will somebody come on to my webinar? Will somebody buy my thing? Very often, we overlook what happens if we're successful.
Most businesses don't fail because nobody wants what they sell. They fail because demand arrives faster than the business can fund, supply or deliver it.
There are three elements to it. You've got sales first, but cash arrives later.
Sales increase, but before the cash arrives, stock must be bought before customers pay, and that puts cost pressure on the business. Costs increase before profit is realised.
Staff capacity stretches before new hires can become productive. That puts risk on the service because standards can deteriorate while the business tries to catch up. And the founder often becomes the emergency department.
So I would ask you: has your business ever won work and then immediately wondered how it's going to deliver it?
Funded, profitable and deliverable growth is good. But growth alone is not automatically good.
As I said before, when you've got a marketing campaign, you're often wondering: is this going to actually work?
But what happens when a successful marketing campaign becomes dangerous? It can create a cash flow crisis.
Three times the normal order sounds like success, but delivering on that success is where the pressure begins.
If you're a product-based business, the first questions to ask are: is there enough stock? Do suppliers need to be paid upfront? How long before the new stock arrives? Do you have enough extra storage, packing or delivery support?
Then, when will customers pay? If they're paying upfront, fantastic. But sometimes there may be 30-day or 60-day terms.
With products, you also have the issue of returns. If someone returns the product, you may have to issue refunds. Those products can no longer be sold for their full retail value.
So the campaign may be profitable on paper while the business funds stock, fulfilment, wages and VAT weeks before receiving cash.
If you're a service-based business, does the team have capacity, or will overtime and freelancers be needed?
How long before new people become productive? Who will manage and quality check that additional work? Will existing customers receive a worse service while you're trying to meet the new demand? And how long before new customers actually lose patience?
These are all the things that a successful marketing campaign can bring, which can give you a bit of a headache.
I'm sure, as founders, you already know this. It's probably been drummed into you, but let me reiterate it. Revenue is not the same as cash.
A sale can improve profit, but it can weaken your bank balance simultaneously. Consider a business that wins £20,000 of new work with a customer who pays in 60 days.
Before payment arrives, you've got to pay £7,000 to a supplier. You've got £5,000 in wages, £1,500 in freelance support and £1,000 in delivery and other costs, plus VAT when that's due.
The accounts may show a profitable sale, but the bank is now showing a funding gap.
So there are two questions I would ask.
Don't just look at whether the sale is profitable. You need to know how much cash the sale consumes, and for how long it consumes it. The bigger the order, the bigger the gap can become.
How many days pass between you paying to deliver the work and actually receiving the customer's money?
Even if the customer is profitable, they can still hurt you, because not every good customer is good for cash flow.
A large customer may look attractive because of their revenue, but size alone does not make a customer valuable.
Let's have a look at the payment terms. Do they demand 60 or 90-day payment terms? Do they regularly dispute invoices, creating further delays?
Are they putting an operational burden on your team? Do they require bespoke work? Are they holding additional stock, or are they consuming disproportionate management time?
Then, finally, you've got dependency risk. Do they expect discounts because of their size? Do they create a dangerous overreliance on a single source of revenue? That's something I would absolutely have a look at in your financials.
A £100,000 customer can be less valuable than several smaller customers if they pay slowly, demand concessions and absorb your capacity.
Customers should always be valued based on the margin, cash timing and operational effort, not revenue alone.
If I was going to give you one question to walk away with, it would be this: who is your biggest customer, and are they also your best customer? Because that's not always the same person.
Faster growth can also hide weaker economics because more sales can disguise a margin problem.
When revenue rises, founders often assume the business is improving. But additional sales frequently come with hidden costs that erode what you earn.
Some of those hidden costs can be things like discounts and advertising premiums, overtime and freelancer costs, express shipping and returns, recruitment fees, additional management time, more complaints and more wastage.
One thing I would actually look at is the margin comparison. In the previous position, you may have £100 of sales and £40 of direct costs, which means you've got £60 of gross profit.
But let's say you start to grow heavily. You've got £100 worth of sales. You've got £45 of costs, but then you've got £10 of VAT, £8 of fulfilment and £5 of discount. Now your gross contribution is almost halved.
The business is busier, but it's earning less from every new transaction. Volume doesn't repair weak margins. It multiplies them. That's one thing to keep an eye on.
Being fully booked doesn't always mean being profitable. Capacity is a financial issue. Service businesses often treat capacity as an operational problem, but it is equally a financial one.
The cost of quality rises. Mistakes increase. Rework increases. Senior people spend time correcting junior work. Refunds and discounts become more likely.
Then the people cost rises as well. Overtime increases. Good staff burn out or leave. Deadlines slip. Customer service declines as the team struggles to cope.
So know your threshold. Know the point at which work requires additional people, systems, premises, management and, more importantly, additional cash.
At what level of workload does your team stop becoming more productive and start becoming more expensive?
When committing to fixed costs, I want you to start thinking about them as commitments to the future because every new monthly cost makes a claim on future sales.
When business is strong, it's easy to add staff, software, premises, vehicles, equipment and contracts.
The problem is not the cost this month. It's the obligation for the next month and the month after.
So ask yourself: is the need permanent? Could you test demand before committing? Can the cost flex with revenue if trade slows down? And what if sales drop 20%?
Every fixed commitment must be serviceable in that downside scenario, not just during the strong trading months.
How quickly could you exit? Know the notice periods beforehand. Understand what your break clauses and exit terms are before signing any agreements.
A fixed cost is a bet you're making that future revenue is going to continue. So place that bet carefully.
When looking at energy costs, that's not just an overhead because energy affects cash flow through usage, timing and contracts.
It's often treated as a bill to be paid rather than a cost to be actively managed.
Some of the hidden drivers of energy costs are seasonal usage and price changes, fixed versus variable tariffs, contract renewal dates and notice periods, equipment efficiency and operating hours, and estimated versus actual bills.
A business may invest in new equipment to increase production and fail to calculate the additional energy cost of running it.
Or it may extend opening hours without checking whether the extra revenue actually covers the additional staffing, heating and lighting.
Some of the practical actions I want you to take away are: know when your energy contract ends and the notice period. Review the actual usage, not just the invoice totals. Compare usage across months and seasons.
Identify equipment or processes that are driving unusual consumption, and include realistic energy costs in pricing and forecasts.
The way to look at it is: what does one extra hour of trading actually cost your business? If you can only examine energy costs when the bill arrives, that's a crazy way to do it.
Your first instinct may be to start cutting costs, but cost-cutting can actually make the business more expensive. The cheapest option can create the highest total cost.
Founders often reduce spending by choosing the lowest-price supplier, employee, software or contractor. But the true cost frequently extends far beyond the purchase price.
If you look at the hidden cost of cheap, you've got poor quality, delays, rework, customer complaints, management time, missed deadlines and lost sales.
A real example: if a cheaper supplier saves you £2,000 annually but causes stock delays that lose £10,000 of sales, that's a problem.
A cheaper freelancer might require so much supervision that the founder could have done the work themselves more efficiently.
So the question to ask yourself is not, "How much does it cost?" Ask, "What does this decision cause?" That distinction separates genuine cost control from a false economy.
If you're a seasonal business, you're going to need cash before the season. Seasonality doesn't just affect the month in which the sales fall. It affects the months leading up to it. The pressure arrives long before the revenue does.
In the first months ahead, you need to order the stock, hire the staff and book suppliers. Cash goes out before a single sale is made.
Then you've got the preparation period. You train new recruits, receive deliveries and prepare your premises. The monthly fixed costs continue regardless.
When peak season actually hits, the revenue arrives, but only if preparation was adequately funded. If the business couldn't fund preparation, it misses the season entirely.
Then you've got the post-season. You review the cash position afterwards, settle outstanding costs and plan for the next cycle.
So the decision isn't: will we make money during the busy period? The decision is: can we finance the preparation required to reach the busy period?
Often, that preparation begins several months earlier than expected.
I always talk about forecasting because this is one of the questions mentees typically ask. How perfect does my forecast need to be?
I keep saying: you don't need a perfect forecast. You need an early warning system.
And 13 weeks is long enough to expose problems, short enough to forecast realistically and simple enough to update every week.
What sort of things do you need to include?
Your opening bank balance, expected customer receipts, supplier payments and payroll, VAT, tax and loan repayments, rent, energy, utilities, stock purchases and other fixed costs, and then the closing balance for each week.
The four questions to ask are: what is the lowest projected cash balance? When does it happen? What causes it? And what can we do before we reach it?
A forecast isn't there to prove that you know the future. It just gives you enough time to change it.
When looking at some of the lowest cash positions, there are three problems that can look like "we need more cash".
Don't borrow before diagnosing the problem. A cash shortage can have three very different causes, and each requires a different response. Applying the wrong solution can make things worse, not better.
The first thing is: is this a timing problem? The business is profitable, but customers pay after the costs are incurred.
Can we improve the payment terms? Can we invoice earlier? Can we take deposits? Or do we need to arrange working capital finance?
Or is it a margin problem? The business is selling, but it's not earning enough per sale.
If possible, can we raise prices? Can we reduce some direct costs? Can we stop discounting? Can we remove some unprofitable lines?
Or is it an overhead problem? There are too many fixed commitments for the current sales level.
Some of the fixes I would look at are: can we renegotiate some of the costs? Can we delay recruitment? Can we remove unused subscriptions? Can we review some of the contracts?
Borrowing can solve a timing problem, but it usually makes a margin problem worse.
So if you are looking at funding, when does it make sense? Funding should only ever accelerate something that already makes commercial sense, not rescue something that doesn't.
An example of good use of funding is buying stock against credible confirmed demand. You're purchasing productive equipment with a clear return. You've identified that.
You're financing a clear working capital gap, supporting a planned and costed seasonal increase, or investing in systems that improve your capacity or margin.
The warning signs are if you're borrowing to cover repeated losses, borrowing without knowing the cause of the shortage, funding low-margin sales, using finance to avoid reducing costs or assuming that future growth is going to make everything good.
Be very careful, because finance buys time. It does not fix a weak business model.
If you are going for funding, what do lenders want to see? Lenders are not judging your idea. They're judging your ability to repay.
A well-prepared application communicates credibility through specificity, not enthusiasm.
What they typically want to see is: have you got a clear purpose for the funding? Have you got historic accounts or financial records? Do you have current management information? Do you have a realistic cash flow forecast?
What are the existing debts and commitments looking like? Have you got evidence of demand and a credible route to profitability?
They'll also look at your personal and business credit history, and evidence that you actually understand the risks.
What does a weak application look like? "We need £50,000 to grow." That's going to get shut down almost immediately.
But if you come in with, "We need £50,000 to purchase stock against confirmed orders. It will generate £85,000 of sales over the next six months, and we expect a £30,000 gross profit. Here's the repayment plan and downside scenario."
Can you see how that is much stronger? There's much more credibility built in. So be specific. Build credibility. Don't go with vague ambition.
If you are going for grants, one thing I would absolutely say is: grants are useful, but they're not part of the business model. Treat grants as an opportunity. They're not oxygen.
Yes, grants can help businesses invest in energy efficiency, equipment, innovation and training, but they come with conditions and they can create their own cash flow complications.
Grants might involve eligibility criteria, restricted use, match funding requirements, or you may not get the funding upfront. It may be reimbursement after spending, not before.
With some grants, there's a long decision period with no guarantee of success, and there are significant evidence and reporting requirements.
So the question I would ask is: could the business still proceed if the grant payment arrived later than expected?
A grant can improve a good project, but it should not be the only thing keeping the project alive.
Here are the numbers you should know before saying yes to growth.
Before accepting a large order, launching a campaign or signing new contracts, work through these questions.
The answers will tell you whether an opportunity is genuinely worth pursuing or whether it carries a risk you haven't factored in yet.
If you're looking at revenue and profit, what revenue will it generate? What's the real gross profit after all direct costs, including the hidden ones?
Secondly, cash and timing. How much cash is required upfront? When will the customer pay? What is the funding gap between payment coming out and cash coming in?
Capacity and people. Do we have sufficient stock or team capacity? Will we need extra people or equipment? And how quickly can they become productive?
Finally, risk and resilience. What happens to existing customers? What if demand is lower, higher or later than expected? Can the business survive this downside scenario?
Don't get too wrapped up in whether the opportunity is exciting. Look at whether the business can survive delivering it.
There are five warning signs that growth is becoming dangerous.
If revenue is up but bank balance is down, you're selling more but your cash position is weakening. That's a clear sign that growth is consuming more cash than it's generating.
If customers are waiting or complaining more, then service standards are slipping as the business stretches beyond its comfortable capacity.
If unplanned costs are rising, such as overtime, freelancers and express delivery, that's eroding your margin as you grow.
If you're the founder and you're back in the middle, central to everything, approving everything, then the business can't operate without you. If the founder solves every problem, growth has outpaced the systems and people in place.
Finally, if the business needs the next sale to fund the last one, that's an extremely dangerous position to be in. When every new payment is required to cover old commitments, the business is not financing growth. It's chasing cash.
Here are practical actions for the next seven days.
Build your 13-week forecast. Create or update a 13-week cash flow forecast.
Know your payment gaps. Calculate exactly how long customers take to pay and review the largest monthly cost.
Check all your contracts. Note all the major renewal dates and notice periods, including energy contracts.
Identify your capacity threshold. Pinpoint the level at which additional sales require more people, more stock or more equipment.
Review your customer portfolio. Assess whether your largest customers are also your most profitable and reliable.
Also, check for revenue concentration. If 70% of your sales are coming from only five clients, you're putting yourself at enormous exposure if they decide to move away.
Finally, sustainable growth means the business can afford to deliver what it sells.
Do you have enough cash to fund operations? Is the margin healthy enough to make growth genuinely profitable, not just busier? Do you have enough capacity?
And is there enough visibility to see problems before they become crises, so you're able to act while options remain open?
Before chasing the next opportunity, ask: can we fund it, can we deliver it and can we still protect the business we already have? That's everything from me.
Caitriona: Thank you, Jay. If anyone has any questions, please do put them into the chat.
I can see we have a question from Jillian. Jillian is asking: do you have a recommendation for a certain cash flow tool for a product-based business?
Jay: Cash flow tools, so long as they are linked to your accounting software and you are doing bank reconciliations monthly, something as simple as Excel is good enough.
But if you have accounting tools like Xero or QuickBooks, they will often do the cash reconciliations and the forecast for you.
Caitriona: Thank you. When a business owner says, "I'm not a numbers person", what do you tell them?
Jay: It's OK not to be a numbers person, but I think you do need to understand some of the basics.
Of course, you don't need to get into Excel formulae and things like that. But understand the key numbers that make sense.
What are your gross margins? What does it cost you to service a particular client? Does every extra sale give you enough profitability to cover all of your costs?
Caitriona: Thank you. A question from Leo. They say thank you for a great session, Jay. They have two questions. The first one is: how much emergency fund should be reserved?
Jay: That depends on whether you're a product or service business.
If you're a product business, I would look at demand and seasonality. This is where the 13-week cash flow forecast comes in. Have a look at what that lowest position is. Do you have enough to cover that?
If you're a service-based business, it's very often about whether you have enough demand coming through and whether you've actually got enough capacity in the team to deliver the service.
Caitriona: That leads nicely into the other question, which is: how do you build a cash flow forecast if it's a new business?
Jay: For a new business, you're going to start with your opening bank balances and some of the fixed and variable costs.
Really, what you're doing is trying to estimate what a realistic sales figure is likely to be. What does my revenue actually look like? Do I want to forecast this weekly, or do I want to zoom out and have a look at it on a monthly basis?
What makes sense for your particular business?
Once you start to get to whatever that number is in your mind, sometimes I say, whatever that number is, if it's £100, drop it down by half and see what happens.
Caitriona: Thank you. What should a business owner be tracking week to week to stay on top of their cash position?
Jay: This is where you're looking at the working capital cycle. It's money that's going out.
If you're a product business, maybe you're buying stock. How long does it take to sell that stock? And then how long does it take for that money to come back in?
Day sales outstanding and the working capital cycle are some of the terms I would Google and have a look at.
From a service perspective, salaries are taking the place of stock, but then you're looking at the invoicing period. When are you expecting your clients to actually pay you?
Caitriona: Thank you. What's one thing that's stopping most business owners from getting on top of their finances that really shouldn't be a barrier?
Jay: I think it's the fear of numbers and the fear of getting all of this information.
Sometimes, having the dashboard on your accounting software can be cognitive overload. We're all small business owners. We all have to wear multiple hats.
Sometimes you don't have the mental bandwidth to look at what's being said on your accounting software, because you've got to look at what's being said and then translate it into: what does this mean for my business? What do I now need to do with this?
OK, my gross margins are 70%, but so what? What does that actually mean for me?
Caitriona: Thank you. We're just going to the end of the session now, but we do have time for one final question.
What's the single most impactful change a business owner can make to their finances this week?
Jay: Get the 13-week cash flow forecast in play. As soon as you understand exactly what the business is going to look like and where the danger periods are, you're going to sleep easier.
Caitriona: Thank you. That's great advice to end on.
Thank you so much to everyone for joining us on today's Powering Local Businesses webinar. We will share the recording and further resources in a follow-up email this afternoon.
Thank you to Jay for sharing your expertise and practical insights with us. It's been a really useful session.
I hope everyone has a lovely rest of your day. Thank you.
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