Small Business Cash Flow Calculator
Project your monthly cash flow for 12 months, find your break-even point, and spot potential cash shortfalls before they become emergencies.
Revenue & Growth
Monthly Fixed Expenses
Cash Flow Timing
Monthly Net Income
$4,350
Gross Margin
68%
Operating Margin
17.4%
Break-Even Revenue
$18,095
12-Month Cash Flow Projection
| Month | Revenue | Expenses | Net Income | Cash In | Cash Out | Net Cash | Ending Cash |
|---|---|---|---|---|---|---|---|
| Month 1 | $25,000 | $20,650 | $4,350 | $12,500 | $19,618 | $-7,118 | $42,882 |
| Month 2 | $25,500 | $20,835 | $4,665 | $25,350 | $19,793 | $5,557 | $48,439 |
| Month 3 | $26,010 | $21,024 | $4,986 | $25,857 | $19,973 | $5,884 | $54,323 |
| Month 4 | $26,530 | $21,217 | $5,313 | $26,374 | $20,156 | $6,218 | $60,541 |
| Month 5 | $27,061 | $21,412 | $5,649 | $26,902 | $20,341 | $6,561 | $67,102 |
| Month 6 | $27,602 | $21,613 | $5,989 | $27,440 | $20,532 | $6,908 | $74,010 |
| Month 7 | $28,154 | $21,817 | $6,337 | $27,988 | $20,726 | $7,262 | $81,272 |
| Month 8 | $28,717 | $22,025 | $6,692 | $28,548 | $20,924 | $7,624 | $88,896 |
| Month 9 | $29,291 | $22,238 | $7,053 | $29,119 | $21,126 | $7,993 | $96,889 |
| Month 10 | $29,877 | $22,455 | $7,422 | $29,701 | $21,332 | $8,369 | $105,258 |
| Month 11 | $30,475 | $22,676 | $7,799 | $30,296 | $21,542 | $8,754 | $114,012 |
| Month 12 | $31,084 | $22,901 | $8,183 | $30,901 | $21,756 | $9,145 | $123,157 |
Cash Conversion Cycle
15 days
Lowest Cash Point
$42,882 (Month 1)
Cash Runway
12+ months
Tips to Improve Cash Flow
- • Keep at least 3-6 months of operating expenses in cash reserves.
- • Growth requires working capital — ensure cash keeps pace with revenue growth.
Why Cash Flow Matters More Than Profit
Profitable businesses fail every year because they run out of cash. Revenue on paper doesn't pay bills — cash does. The gap between when you earn revenue and when you collect payment (accounts receivable) versus when you owe expenses and when you actually pay them (accounts payable) creates a cash flow timing gap that can sink otherwise healthy businesses.
A 2025 JP Morgan study found that the median small business holds only 27 days of cash reserves. Businesses with fewer than 15 days of cash buffer had a 50% higher chance of closing within two years. This calculator helps you project that gap forward 12 months so you can plan ahead.
Key Cash Flow Metrics Explained
| Metric | Formula | Healthy Target |
|---|---|---|
| Gross Margin | (Revenue - COGS) / Revenue | 50%+ for services, 30%+ for retail |
| Operating Margin | Net Income / Revenue | 10-20% |
| Cash Conversion Cycle | Receivable Days - Payable Days | Under 30 days |
| Burn Rate | Monthly net loss (when negative) | $0 (profitable) |
| Cash Runway | Cash Balance / Monthly Burn Rate | 6+ months |
| Break-Even Revenue | Fixed Costs / (1 - Variable Cost %) | Below current revenue |
Cash Flow Management Strategies by Stage
| Business Stage | Typical Cash Concern | Top Strategy |
|---|---|---|
| Startup (Year 1) | High burn rate, no revenue cushion | Minimize fixed costs, negotiate payment terms |
| Growth (Years 2-3) | Revenue growing but cash lagging | Invoice factoring, line of credit, faster collections |
| Established (4+ years) | Seasonal fluctuations | Cash reserves of 3-6 months expenses |
| Scaling | Hiring ahead of revenue | Phased hiring, performance milestones |
How to Improve Your Cash Conversion Cycle
The cash conversion cycle measures how many days your cash is tied up in operations. A shorter cycle means healthier cash flow. You can shorten it on two fronts: collect faster and pay strategically. Offer 2/10 net 30 terms (2% discount for paying within 10 days) to speed up receivables. Negotiate 45-60 day payment terms with suppliers instead of net 30. Use automated invoicing to eliminate billing delays.
Frequently Asked Questions
How much cash reserve should a small business keep?
The standard recommendation is 3-6 months of operating expenses. However, seasonal businesses should hold more — up to 6-9 months. If your business has recurring revenue (subscriptions, contracts), you may operate safely with 3 months. If you depend on project-based income with variable timing, aim for 6+ months.
What's the difference between cash flow and profit?
Profit is an accounting concept — revenue minus expenses on paper. Cash flow is the actual movement of money in and out of your bank account. You can be profitable on your income statement but cash-negative if customers take 60 days to pay while your bills are due in 30 days. This is why growing businesses often face a "cash flow crisis" — they're profitable on paper but can't cover today's bills.
Related tools: Break-Even Calculator and Profit Margin Calculator.