Growth sucks cash. It's just math.
"Your business can run out of cash in 60 days with a full pipeline, record revenue, and a P&L that looks clean on every line. Most founders don't believe that — until it happens to them."
$200,000.
That's how much cash a business doing $100,000 a month has floating outside its bank account at any given moment — if it takes 60 days to get paid.
Not some of the time. All the time. As a permanent feature of the operation.
Most founders don't know this number exists. And they definitely don't know what happens to it when they try to scale.
I want to walk you through a piece of math I run with every founder who sits across from me and tells me their business is ready to grow.
It's not a framework. It's not a mindset. It's arithmetic. Third-grade arithmetic dressed up in the language of finance. And it's the single reason "growth sucks cash" is something I say out loud instead of hedging into softer language.
Most founders think of cash as a result. You sell something, you get paid, cash goes up. Simple.
The problem is the gap between the selling and the getting paid.
That gap has a name. Accountants call it the Cash Conversion Cycle. I call it the Cash Void, because "cycle" makes it sound neutral and it isn't. It's the place your money goes to wait while you wonder why your bank balance doesn't match your P&L.
THE FORMULA
DSO + DIO − DPO = CCC
DSO — Days Sales Outstanding. How long until your customers actually pay you after you invoice them.
DIO — Days Inventory Outstanding. How long inventory sits before it sells. Service businesses — this is zero. Your cycle simplifies to DSO minus DPO.
DPO — Days Payable Outstanding. How long you take to pay your suppliers.
I know. It reads like an accounting class. Stay with me.
Say you invoice a client on the 1st of the month. They pay on Net 60. Your DSO is 60. You paid your contractors on day 15, your software on day 1, your lease on day 1 — your DPO averages maybe 10 days. You hold no inventory, so DIO is zero.
Your CCC: 60 + 0 − 10 = 50 days.
Every dollar you earn takes 50 days to become a dollar you can actually use.
Now the uncomfortable part.
THE VOID GETS DEEPER WHEN YOU GROW
At $25,000 a month, a 50-day cycle means about $40,000 is floating at any given time. Annoying. Survivable. You feel it as tight cash flow.
At $100,000 a month — same business, same 50-day cycle — $165,000 is floating. Permanently.
At $250,000 a month, $400,000 is floating.
Same cycle. Same operation. Same billing terms. The hole doesn't stay the same size when you grow. It gets proportionally deeper — by the exact multiple of your revenue increase.
This is why founders who land a big contract or double their monthly billing suddenly can't make payroll. Their P&L looks beautiful. Their bank account looks like an emergency. Both are true. The money they "made" is real. It's just not there yet. And it won't be for 50 days.
Growth didn't fix the cash problem. Growth deepened it.
That's the sentence I want you to sit with.
THE SECOND NUMBER NOBODY RUNS — THE CAPITAL BRIDGE
If your Cash Void tells you how much money is floating at your current revenue, the Capital Bridge tells you how much cash you need on hand before you grow.
Because growth isn't free. It's capitalized. If you don't capitalize it, you finance it — with your own stress, your own credit line, or your own bankruptcy filing.
Capital Bridge = (Δ Revenue / 365 × CCC) + CapEx + Ramp Op Burn
Translated:
(Δ Revenue / 365 × CCC) — the working capital that has to float for the new revenue. Going from $100K/month to $200K/month is $1.2M more in annual revenue. Divide by 365 to get daily revenue, multiply by your 50-day cycle, and you need another $165,000 in working capital to carry the increase. Before you spend a dollar on growth.
CapEx — equipment, buildout, software, infrastructure. What you have to buy before the new revenue arrives.
Ramp Op Burn — new hires, contractors, ad spend, running for however many months until the new revenue covers them.
Add it up honestly and the number is almost always larger than founders expect. Two to four times larger, in my experience. Which is why growth plans built without this calculation end in credit line calls, panic hires getting cut, and founders discovering — too late — that the plan was underfunded from day one.
Nothing dramatic happened. The math was always there. Nobody ran it.
A FOUNDER I WORKED WITH
About $200K a month. Recurring revenue, real clients, growing. On paper, every number was trending right. His bookkeeper was sending him P&Ls weekly and the P&Ls looked fine.
Then a $500,000 receivable went bad. One client. One default. And the whole operation started unraveling.
His breakeven was $100K a month. He didn't know that number. Three years into the business. He'd never calculated his cycle. He'd never run a Capital Bridge. His financial picture was being managed by someone whose job was to record transactions, not interpret the business.
By the time we talked, he was one bad month from closing down a business that had done $2.4M the year before.
The $500K default didn't kill him. The unrun math did.
WHAT HAPPENS WHEN YOU DON'T RUN THIS MATH
You grow. For a while, nothing looks wrong. Revenue is up. Team is bigger. The story works from the outside.
Then small things start failing in sequence. A client pays 45 days late instead of 30. A line of credit gets reviewed. A big contract costs more to deliver than you projected. Each one, on its own, is survivable. But you have no reserves — because the Void has been draining them in real time for two years, and nobody was watching the right number.
What it actually costs, for the founders I've sat across from:
Payroll run on a personal credit card. A founder personally guaranteeing bank debt to keep the lights on. A-players quitting because the compensation they were promised can't be paid on time — the cash wasn't there on the day it needed to be. Price concessions made to close deals faster, quietly killing margin. A spouse who stops asking how the business is going, because they already know the answer.
And the one that costs the most and never shows up in dollars — the founder stops making decisions from data and starts making them from fear. Every hire becomes a risk. Every growth move becomes a gamble. Every Monday becomes a fire drill.
The business you built to give you freedom starts owning you.
None of that shows up on a P&L. All of it traces back to cash you didn't know was missing, because you never ran the math.
THE THREE QUESTIONS
If you're growing — or planning to — and you can't answer these three in under a minute, you're not ready:
What is your current Cash Conversion Cycle, in days?
How much cash is floating right now? (Monthly revenue × CCC ÷ 30.)
What is your Capital Bridge for the next level you're planning to hit?
These aren't advanced finance questions. They're the most basic arithmetic of scaling a business. The fact that most seven-figure founders can't answer them isn't a failure of intelligence. It's a failure of anyone ever showing them which math actually matters.
Bookkeepers don't run this math. Most accountants don't. Most "fractional CFOs" priced at $2K a month don't.
Somebody has to. Or the next growth cycle is the one that breaks you.
THE NEXT MOVE
The Cash Flow Accelerator is a live three-hour working session where we run this math — on your actual numbers.
You leave with your Cash Void quantified. Your Capital Bridge calculated. Your cycle named in days. And your 90-day plan to compress it.
Not theory. Not templates. Your business. Your math.
Check out notes if that sounds like something you need.
If you've been growing and somehow have less cash than you did a year ago — this session is the math you haven't run yet.
— Cruz
Originally published on LinkedIn.