You win an annual contract.
It gives you a reason to feel more confident about the company. A customer has committed. The commercial work is producing results. You can start thinking about the next hire or how you are gonna use this money to improve your go-to-market execution.
Then you look at the delivery plan.
Implementation requires work immediately. A supplier needs paying before deployment. The customer’s first payment arrives several weeks later.
The contract may be valuable. Your company still needs to finance the time between winning it and collecting the money.
As a founder, that is the question I would want answered before making another commitment:
What do we need to pay for before this opportunity starts funding itself?
Follow the money through the business
In its FY2026 results, Peloton reported $63.2 million in net income and $387.6 million in cash generated by operating activities.
Its cash-flow statement separately identifies movements in customer receivables, inventory and supplier balances, alongside other adjustments. Profit and operating cash flow measure different things.
For a small SportsTech company, the same distinction appears in everyday decisions.
A club signs, but implementation begins before payment. A hardware customer places an order, but manufacturing requires a deposit. A consumer pays for an annual subscription, but the company must provide the service throughout the year.
A signed contract, recognised revenue and money received should therefore be tracked separately.
I would judge a commercial opportunity partly by the cash commitments it creates. That can change the payment terms, delivery schedule and resources we are prepared to offer.
Start with the decision you need to make
Before opening a spreadsheet, write down the commitment under consideration.
It might be:
Hiring someone to take ownership of onboarding.
Buying equipment for a new customer.
Starting an implementation before receiving payment.
Investing in another market while waiting for existing customers to pay.
Then ask:
What would have to remain true for us to afford this?
This becomes particularly difficult when you are winning your first customers. Each relationship matters, and you want to make it work.
You agree on 30-day payment terms. Sixty days after issuing the invoice, you are still waiting.
Meanwhile, the freelancers delivering the work expect to be paid at the end of the month.
Do you continue providing the service? Ask for a payment plan? Put further work on hold? How much longer can you finance the gap?
I’ve been there, and these decisions are uncomfortable. You want to protect the relationship while honouring your commitments to the people doing the work.
The customer’s circumstances matter too. In live events, income can be concentrated around particular dates, while costs arrive much earlier. Understanding that timing helps you negotiate an arrangement both businesses can sustain.
My advice is to have that conversation before delivery begins.
Agree when payments will happen, who handles invoice approval and how you will address a delay. If their payment schedule creates a gap, establish how that gap will be funded before committing to the work.
When a payment slips, raise it early and agree on a specific next step. Be honest about what you can realistically continue to deliver.
Honesty and transparency build trust when they lead to commitments both sides can keep. That includes being clear about the financial limits of your own business.
The blueprint: a rolling three-month cash view
Create one column per week (use simple tools like Notion or even an Excel spreadsheet), using actual dates, covering the next three calendar months.
Start with cash available for company use today. Keep restricted funds and money held for others separate.
For each week, record six things:
1. Opening cash
The previous week’s closing balance.
2. Expected receipts
Customer payments and other inflows, listed separately and placed on realistic receipt dates.
3. Committed payments
Payroll, suppliers, taxes, debt and other existing obligations.
4. Proposed payments
The hire, equipment or other spending you are considering.
5. Closing cash
Opening cash, plus receipts, minus payments.
6. Important assumptions
What must happen for those amounts and dates to hold.
Use actual payment behaviour where you have it. An invoice’s due date and the date a customer normally pays may differ.
For larger receipts, check what still needs to happen: delivery, acceptance, purchase-order approval or invoice processing.
For recurring consumer receipts, use a realistic view of existing customers, renewals, refunds and payout timing.
Keep uncommitted investment in a separate scenario. The operating plan should make clear what happens if it does not arrive.
A new customer can create a funding gap
Consider this simplified, hypothetical example.
A SportsTech software company has:
€18,000 in available cash.
€3,000 of existing weekly payments.
A new €36,000 annual contract.
An initial €18,000 payment expected in week four.
€8,000 of additional onboarding payments in week two.
Here is what happens during the first four weeks.
Week one
The company starts with €18,000 and pays €3,000.
Closing cash: €15,000.
Week two
It pays the usual €3,000, plus €8,000 for onboarding.
Closing cash: €4,000.
Week three
Another €3,000 leaves the account.
Closing cash: €1,000.
Week four
The expected €18,000 customer payment arrives, and the company pays its usual €3,000.
Closing cash: €16,000.
The week-four closing balance looks reassuring.
But the company reaches the end of week three with only €1,000.
If the customer’s payment moves to week five, week four shows a €2,000 funding shortfall. Without another source of funds or an agreed change to payments, the company cannot meet all the scheduled obligations.
Even the original scenario needs a closer look: if the €3,000 payment leaves on Tuesday and the customer pays on Friday, there is a gap within the week.
A positive closing balance does not establish that every payment can be made on its due date.
Where the margin is tight, map the relevant days.
Decide before the pressure arrives
Choose a minimum cash buffer that reflects your upcoming obligations, uncertainty and the time needed to respond.
Then identify:
The first date the forecast falls below it.
The assumption responsible.
The action available.
The latest date for taking that action.
The person who owns it.
An arbitrary threshold is less useful than understanding which obligations it protects.
Include founder pay honestly. If the plan depends on founders reducing or postponing their income, make the amount, duration and personal feasibility explicit.
That is a real financing commitment by the people building the company.
Keep the short view connected to the longer commitment
A three-month forecast helps you manage immediate timing. A monthly view over the next year helps you assess commitments extending beyond it.
Before hiring, look at the continuing cost of the role. Before accepting an annual prepayment, consider the service obligations it funds. If a funding process or customer payment cycle extends beyond three months, extend the relevant forecast.
Review the weekly view against actual bank movements, explain significant differences and move the horizon forward. Have your accountant check the obligations and treatment relevant to your business.
For me, the purpose is to preserve the ability to make deliberate choices.
Before your next significant commitment, answer three questions:
What is our lowest projected cash balance?
Which assumption could make it worse?
What will we do, and by when, if that happens?
Which commitment in your business depends most heavily on money arriving when you expect it?
You can reply with the assumption, without sharing confidential figures.