Latest / Cash Flow Conversations with Fexingo: Working Capital, Receivables, and Small Business Finance / How a Landscaper Used Rolling Forecasts to Predict Cash Crunches
Transcript
- Lucas: If you run a seasonal business, you probably know the feeling. You've got profitable contracts on the books, customers who pay on time, and yet somehow your bank account dips into the red every spring before the first big check clears. Luna: Right — that cash gap between when you have to pay your people and when the client pays you. It's the classic small-business squeeze. Lucas: Exactly. And today I want to talk about a tool that's surprisingly underused by small businesses: the rolling cash flow forecast. Not the annual budget you file away, but a living 13-week projection that you update every week. Luna: I've heard of that in corporate finance — treasury teams use rolling forecasts all the time. But for a small business owner? That sounds like a lot of spreadsheet work. Lucas: It's less work than you think, and it can save you from a cash crunch. I want to walk through a specific case: a landscaping company in Boise, Idaho, called GreenScape. Owner is Maria Torres. She started doing this in 2024 after two consecutive springs where she had to scramble for payroll. Luna: What was the problem exactly? She had the contracts, right? Lucas: She did. GreenScape does commercial landscaping — office parks, HOA common areas, a couple of municipal contracts. Those clients pay net-30 or net-45. But the work ramps up hard in March and April. She's hiring seasonal crews, buying mulch and fertilizer, paying overtime on equipment repairs. In March 2023, her account hit negative $12,000 even though she had $180,000 in receivables outstanding. Luna: So profitable on paper, cash negative in reality. And that's exactly where a forecast could have helped. Lucas: And by the way, if you're getting something out of these conversations — maybe you run a business yourself, or you're thinking about starting one — a couple of dollars a month is genuinely what keeps this show going. You can find us at buy me a coffee dot com slash fexingo. It makes a real difference for a small team like ours. Luna: Yeah, absolutely. And we keep the show ad-free that way. So thanks to anyone who's already chipped in. Lucas: Alright — back to Maria. She sat down with a bookkeeper friend and built a simple rolling forecast. The horizon was 13 weeks. Every Friday she would update four inputs: cash on hand, expected receivables by week, fixed payroll, and variable costs like fuel and supplies. The output was a running cash balance for each of the next 13 weeks. Luna: Thirteen weeks — not 12, not 26. Why 13? Lucas: Because it's exactly one quarter. It gives you enough visibility to see seasonal turns without being so far out that the numbers become fiction. Maria told me she starts each week by checking the oldest week — week one — and comparing it to what actually happened. Then she drops that week and adds a new week 13 at the end. That rolling process keeps the forecast current and builds her intuition over time. Luna: I like that — it's a feedback loop. She's not just predicting; she's learning from her misses. Lucas: Exactly. The first few weeks were rough. Her forecast would show a surplus, then a snowstorm would delay a project and push receivables out. But by summer 2024, she had a clear pattern. She noticed that every year in week 11 of her forecast — around mid-March — her cash balance would drop below $10,000. That became her trigger. Luna: Trigger for what? Lucas: She set up a $50,000 line of credit with her bank. The rule was: if the rolling forecast showed cash below $10,000 at any point in the next 13 weeks, she would draw on the line immediately. Not when she was already negative. That was the key insight — she drew proactively. Luna: So she used the forecast as an early warning system. Instead of panicking when payroll was due, she had a pre-planned response. Lucas: Right. And the result was that in spring 2025, for the first time, she never missed a payroll, never had an overdraft fee, and she actually reduced her interest costs because she paid the line down faster. She knew exactly when the cash would come in — around week 16, when those municipal contracts started paying — so she could plan to repay. Luna: What about the cost of the line? Even a short-term draw has fees. Lucas: Good question. Her line was at prime plus two, so around nine percent at the time. She drew $30,000 for about six weeks. The total interest was under $400. Compare that to the overdraft fees and stress of previous years, and it was a bargain. Plus, having the line in place gave her negotiating power with suppliers — she could take early payment discounts because she had backup liquidity. Luna: So the forecast didn't just prevent a crisis; it actually saved her money on the supply side. Lucas: Exactly. And I think that's the part that a lot of business owners miss. A rolling forecast isn't just about survival. It's a tool for making better operational decisions. Maria told me she now uses her forecast to decide when to hire seasonal workers, when to buy bulk materials, even which contracts to bid on. Luna: How does it help with bidding? Lucas: She looks at the cash gap for each potential contract. If a new client pays net-60, that adds two more weeks of negative cash before the receivable hits. She can factor that into her price. She might bid higher for slow payers, or require a deposit. The forecast gives her the data to have that conversation. Luna: That's a great point — it turns cash flow from a passive problem into an active input for pricing. I think a lot of small business owners price based on cost-plus or what competitors charge, without considering their own cash cycle. Lucas: Right. And Maria's example shows that even a simple spreadsheet, updated weekly, can give you that insight. She's not using any fancy software. Just Excel, with maybe 10 rows of data per week. Luna: What's the one thing you'd recommend for a listener who wants to try this but doesn't know where to start? Lucas: Start small. Don't try to forecast 13 weeks perfectly from day one. Just pick one metric — maybe your cash balance — and project it out four weeks. Update it every Friday. Once you get comfortable, add receivables. Then add payables. The key is consistency, not perfection. Maria's first forecast was terrible. But by week 10, she was within 5 percent of actual cash. Luna: And that consistency builds trust in the numbers. I think that's the real takeaway — it's not about having a crystal ball. It's about having a habit of looking forward. Lucas: Exactly. And for seasonal businesses especially, that habit can mean the difference between a good year and a stressful one. Maria's company is now in its third year with the rolling forecast, and she's planning to expand to a second crew this fall. Luna: I love that — she's using the forecast to make growth decisions, not just survival decisions. Lucas: That's the goal. So if you're running a business with seasonal swings, I'd encourage you to give it a try. One spreadsheet, one hour a week. You might be surprised what you see. Luna: And if you've already tried it, let us know how it went. We love hearing listener stories. Lucas: We do. Thanks for listening, and we'll see you next time.