Lack of financial control is one of the main reasons for the closure of small businesses in Brazil. According to a Sebrae survey, 48% of micro and small businesses close their doors due to issues related to financial planning and cash flow mismanagement. Despite this, many entrepreneurs still underestimate cash flow management, a tool that prevents crises and paves the way for safe business expansion.
For Matheus Beirão, entrepreneur and founder of Queima Diária, a platform with home workout programs, the perspective on cash flow must go beyond simply recording daily inflows and outflows. According to him, this control serves as a radar to identify low sales periods and anticipate peak times, enabling safer decisions.
“Many business owners only look at their cash flow when money is tight, but the secret lies in constant monitoring and planning based on these insights. That’s how we managed to grow—investing at the right time and with greater confidence,” he says.
Why cash flow is crucial
Tracking daily inflows and outflows allows business owners to spot changes in customer behavior and adjust strategies accordingly. For example, a restaurant might notice sales dip at the beginning of the month and plan targeted promotions for that period.
This control also helps manage fixed and predictable expenses, such as rent and payroll, and prepare for unexpected costs. Knowing that the company will need to pay year-end bonuses allows for setting aside funds in advance.
Matheus Beirão emphasizes that understanding business cycles prevents hasty decisions. He notes that relying solely on intuition without concrete data leads many entrepreneurs to take on debt or downsize teams during temporary slumps. “Cash flow shows that a tough period might be just temporary. I once considered cutting costs, but after reviewing the numbers, I realized it was better to hold steady because business would improve in the coming weeks,” he explains.
Predicting and leveraging seasonality
Another key aspect of cash flow is anticipating seasonality. For instance, clothing stores typically see higher traffic during collection changes, while stationery shops experience peak sales in January during back-to-school season.
Businesses that track these fluctuations can adjust inventory and staffing accordingly. The same applies to service providers like beauty salons, which need to prepare for increased demand around holidays.
Beirão notes that understanding these trends allowed him to optimize investments. “When we noticed certain months had higher demand for our products, we increased advertising during those periods, and the results doubled. This cash flow insight was essential,” he shares.
Strategies to expand without straining cash flow
Planning expansions using cash flow also reduces risks. Small renovations or equipment purchases can strain finances if unplanned. The ideal approach is to spread costs so installments align with projected revenue.
Another tip is to gradually reinvest profits. For example, a café looking to open a second location could start by expanding capacity at the current store and assessing the financial impact before taking a bigger step.
For Matheus Beirão, this cautious approach ensured Queima Diária’s steady growth. “The desire to expand is strong, but if cash flow can’t support growth, the dream turns into a nightmare. I always checked for financial breathing room before each step. That’s how we grew without choking operations,” he concludes.
