90-Day Cash Stress Test: A Small-Business Playbook to Survive Any Crunch
Late payments and expensive debt are squeezing margins. A disciplined cash flow stress test for small business gives you control fast — not theory, not hype. Use this 90-day playbook to find runway, avoid panic cuts, and make cleaner, CEO-level money moves.
Market volatility isn’t waiting for your year-end plan. This is a financially fluent, not financial fluff approach designed for operators who need clarity this week, not someday.
Why 90 Days (and Not Zen Forecasting)
Ninety days is the operating heartbeat. In 13 weeks you’ll clear two to six payroll cycles, most supplier terms (Net 30–45), monthly debt service, sales tax, and one quarterly event. That’s where cash crunches show up and where decisions actually stick.
Real outcome: a $2M services firm faced a 25% receipts dip and thin reserves. We built a 13-week view, prioritized deposits on new work, pushed noncritical spend 30 days, and sequenced payables by impact. They protected payroll, hit lender covenants, and avoided six layoffs — while keeping client delivery intact.
Build a Rolling 13-Week Cash Model (Fast)
Keep it simple and weekly. You need visibility, not a PhD. Start with last Friday’s bank balance and map inflows/outflows by week for the next 13 weeks. Update every Friday; roll it forward.
- Line items that matter: opening cash, AR expected by week, AP due, payroll/contractors, taxes, debt service, owner draws, capex, and one-offs.
- Shortcuts: weekly is enough; add daily detail only for payroll and tax weeks. Tie receipts to your AR aging; tie disbursements to your AP list.
- Governance: lock closed weeks, version the file, and add notes on every assumption change.
Run Three Real Scenarios — Mild, Medium, Melt-Down
Your cash flow stress test for small business: three scenarios
Define triggers first so decisions are automatic. Model three inputs: revenue/receipts drop, AR delay, and credit access. Then connect each to actions with thresholds.
- Mild: 10–15% receipts drop or 7-day AR delay. Actions: trim variable spend 10%, move vendor payments to due date, require 25–50% deposits on new work. Threshold: runway < 75 days triggers vendor calls.
- Medium: 30% receipts drop plus 15-day AR delay. Actions: freeze hiring, draw 50–75% of LOC before covenants tighten, extend terms on 20% of AP, launch prepay discount. Threshold: runway < 60 days triggers pay cycle shift (within legal/HR rules).
- Melt-down: 40–50% drop and frozen credit. Actions: implement 20–30% cost reset, factor select invoices, reduce contractor hours, pause nonessential projects. Threshold: runway < 45 days triggers structural renegotiations.
Immediate Liquidity Moves That Actually Work
Prioritize speed and cost. Draw on lines before covenant risk, not after. Use selective invoice factoring on clean, credible accounts only. Enforce deposits, retainers, and milestone billing on all new SOWs.
- Vendor terms: “We’re standardizing to Net 45 for the next two cycles. You’ll be in the priority pay run. Can we confirm that works?”
- Payroll timing: “To streamline cash management, we’re moving payday to next Friday and then to every other Friday. No pay reduction — just a calendar shift.”
- Customer deposits: “To schedule your start date, we require 40% upfront and progress billing tied to milestones.”
Cost Triage: Reversible vs Structural Cuts
Don’t amputate revenue drivers. Sort spend into reversible, one-time, and structural. Cut in that order so you preserve capacity and morale.
- Reversible: pause non-performing ads, defer travel, reduce overtime, suspend low-value subscriptions, push nice-to-have tooling 60 days.
- One-time: sell idle equipment, clear obsolete inventory, negotiate annual software refunds or credits, defer noncritical capex.
- Structural: consolidate roles, renegotiate leases, reprice under-water SKUs, sunset low-margin offers. Pair every structural cut with a delivery/process redesign.
Revenue Acceleration Tactics with Quick ROI
Your fastest “funding round” is customers. Offer limited-time retainers, prepayment discounts with clear boundaries, and bundle high-attach services. Price rush/complexity appropriately.
- Retainers: convert ad-hoc work into 3–6 month retainers with 30–40% upfront.
- Prepay: 5–8% discount for 3 months prepaid; cap the discount and tie to auto-debit.
- Bundles: package setup + training + support; upsell add-ons at contract renewal.
- Collections: prioritize top 10 balances by size and age. Sequence: friendly reminder at 3 days, firm at 10 days, intent-to-assign at 21 days. Offer card/ACH links in every email.
Short-Term Metrics You Must Track Daily/Weekly
In crunch time, obsession beats complexity. Track a tight set of indicators and alert on thresholds. Your model informs the moves; the metrics keep you honest.
- Cash runway days: ending cash divided by average weekly burn × 7. Red line at 60 days.
- Weekly cash burn: outflows minus inflows (exclude LOC draws). Trend direction matters.
- AR days (DSO): target improvement each week; flag slips over 5 days.
- Vendor concentration: percent of AP owed to top 5 vendors; high concentration invites phone calls early.
- Free cash: ending cash minus next week’s payroll and taxes. Must stay positive.
Set up simple alerts: daily bank balance ping, Friday cash update, and auto-emails when runway < 60/45/30 days. Use a shared spreadsheet and a one-page dashboard; no CFO required.
When to Bring JLW In — And What We’ll Deliver Fast
Call us when runway ≤ 60 days, payroll timing gets tight, lenders request projections, or vendors start escalating. If you’re unsure, we can run a rapid cash flow stress test for small business to reveal blind spots in 48 hours.
JLW’s rapid play: a triage call, a built-for-you 13-week model with Mild/Medium/Melt-down scenarios, lender and vendor outreach scripts, and a 30-day action plan you can execute Monday. We’ll host weekly stand-ups until your runway and confidence are back.
Volatile environments punish hesitation. A disciplined 90-day plan buys time, protects people, and keeps your growth optionality intact. When you need a pragmatic partner — not cheerleading — we’re here.