Lack of control over finances is one of the main causes of small business closures in Brazil. According to a Sebrae survey, 48% of micro and small businesses close their doors due to issues related to lack of financial planning and cash flow mismanagement. Despite this, many entrepreneurs still underestimate cash flow, a tool that prevents crises and paves the way for the safe expansion of the business.
ToMatheus Beirão, entrepreneurial founder ofDaily Burnplatform with exercise programs to do at home, the view on cash flow needs to go beyond just recording daily income and expenses. According to him, this control acts as a radar to identify periods of low sales and anticipate moments of high sales, enabling more secure decisions.
“Many business owners only look at their cash flow when they run out of money, but the secret is to constantly monitor and plan based on this data. That’s how we’ve managed to grow, investing at the right time and with greater security,” he says.
Why cash flow is crucial
Monitoring daily entries and exits allows the business owner to notice changes in customer behavior and adjust their strategies. For example, a restaurant may notice that sales drop at the beginning of the month and, as a result, plan specific promotions for that period.
This control also helps to manage fixed and already predictable expenses, such as rent and payroll, and to prepare for additional costs. Knowing that the company will have to pay the 13th salary at the end of the year allows for reserving resources in advance.
Matheus Beirão emphasizes that understanding business cycles prevents hasty decisions. According to him, relying solely on intuition, without concrete data, causes many entrepreneurs to incur debts or reduce teams during periods of temporary downturn. "The cash flow shows that that bad moment may be just temporary. I have already thought about cutting costs, but when I looked at the numbers, I realized it was better to hold on, as the situation would improve in the following weeks," he explains.
Predict and take advantage of seasonality
Another relevant aspect of cash flow is the forecast of seasonality. Clothing stores, for example, tend to have higher activity during collection changes, while stationery stores experience sales peaks in January, during the back-to-school period.
Companies that monitor these variations can prepare stocks and teams according to demand. The same applies to service providers, such as beauty salons, who need to better organize themselves around holidays.
Beirão comments that understanding these fluctuations allowed him to optimize investments in his companies. "Upon realizing that certain months had higher demand for our products, we started investing more in advertising during those periods, and the results doubled. This cash flow analysis was essential," he reports.
Strategies to expand without suffocating cash flow
Planning expansions using cash flow also reduces risks. Small renovations or equipment acquisitions can compromise finances if not properly planned. The ideal is to parcel expenses so that the installments fit within the projected revenue.
Another tip is to gradually reinvest part of the profits. A coffee shop that wants to open a second location, for example, can start by increasing the capacity of the current store and assessing the financial impact before taking a bigger step.
For Matheus Beirão, it was this care that ensured the Daily Burn grew steadily. "The desire to expand is great, but if the cash flow cannot support the growth, the dream becomes a nightmare. I always analyze whether there is enough financial cushion before taking each step. That way, we grow without suffocating the operations," he concludes.
