Your Q1 Cash Plan: Stop Hoping and Start Allocating
You don’t need another “yearly budget.” You need a Q1 cash plan that tells your money where to go before it ghosts you. This is the blueprint I use with owners who are tired of surprises, “oops” tax bills, and living invoice to invoice.
The only goal that matters
Cash you can count on. Not projections. Not vibes. Dollars already allocated to the things that keep your business and life stable: taxes, owner pay, profit, and operating expenses—in that order.
Set your non-negotiable targets
Owner Pay (OP): Your take-home. Tie it to real revenue, not hope.
Tax (TX): Federal/state/self-employment—fund it as revenue arrives.
Profit (PF): A small, sacred slice that compounds into options.
Operating Expenses (OE): What’s left—run a tighter ship here, not in OP/TX.
Aim for a starting split like OP 35% / TX 15% / PF 5% / OE 45%. Adjust after the first month.
Action plan: build your Q1 cash rails
1) Open the right bank buckets
Create four business sub-accounts: Owner Pay, Taxes, Profit, Operating.
If your bank resists, switch banks. This system lives or dies on separation.
2) Decide your default allocation
Pick your base split (e.g., 35/15/5/45).
If your margins are thin, start OP 30 / TX 15 / PF 1 / OE 54 for 30 days, then step PF up to 3–5%.
3) Allocate cash the same days every week
Twice weekly sweep (e.g., Tue/Fri, 10:00am).
Move all collected cash (not invoiced—paid) per the split into each bucket.
Pay bills from Operating only.
4) Lock in a real Owner Pay rhythm
Two payrolls/month from the OP bucket.
If OP runs short, you don’t cut OP—you fix pricing, scope, or OE.
5) Remove tax anxiety—automate it
Fund TX with every sweep.
Make quarterly estimates from the TX bucket; ignore the checking account.
If TX is consistently high (>18%), talk to your CPA about S-Corp or entity tweaks.
6) Pre-fund known Q1 spikes
Annual software renewals, insurance, contractor retainers, inventory—estimate and park the cash now in Operating.
If you can’t pre-fund? You have a pricing or margin problem, not a cash problem.
7) Cap spending with simple rules
Operating Cap: If Operating falls below 4 weeks of run rate, freeze non-essentials.
Card Rule: No card spend unless the equivalent cash sits in Operating today.
Your 30-minute weekly cadence
Every Monday (or Tuesday if Monday is chaos), 30 minutes:
Scoreboard (5 min):
Cash in each bucket vs. target.
Weeks of Operating runway (Operating ÷ weekly OE).
Open AR aging; collect anything >15 days.
Pricing check (10 min):
Pull top 5 active clients/projects. Are they at current pricing?
If not, draft upgrade or scope letter for each. Send two this week.
Spend triage (5 min):
Cancel/pauses: anything not touching revenue or delivery quality.
Negotiate: software and contractors; ask for annual prepay discount.
Pipeline math (10 min):
Add up expected cash collections for next 14 days.
If collections < 2× weekly OE, trigger a micro-push (see below).
Micro-pushes that move cash in 48–72 hours
Unbilled work: Invoice partials—stop waiting for “final.”
Fast-pay incentive: 2% discount for payment within 48 hours.
Add-on offer: A scoped, high-margin add-on to current clients (no fulfillment delay).
Fix the three leaks killing your cash
Leak #1: Scope creep
Action: Put Change Orders in your agreements. Anything beyond scope = a new price.
Script: “Happy to include X. That’s outside the original scope—here’s the add-on price and timeline.”
Leak #2: Slow collections
Action: Auto-collect with ACH/credit card on file. Late fee after 7 days.
Script in invoice: “Payment runs automatically on due date. Need more time? Request a payment plan before the due date.”
Leak #3: Underpricing legacy clients
Action: Legacy Upgrade—raise 10–20% with options.
Structure: Good (keep current scope), Better (priority support), Best (outcome guarantee).
Implement with a 30-day notice and a clean off-ramp.
Q1 playbook by weeks
Weeks 1–2: Open buckets, set split, start twice-weekly sweeps.
Weeks 3–4: Clean AR; move all clients to auto-pay; kill zombie subscriptions.
Weeks 5–6: Upgrade legacy pricing; pre-fund Q2 known expenses.
Weeks 7–8: Evaluate split using real data; raise PF by 1–2pts if stable.
Weeks 9–12: Standardize micro-pushes; trim OE to hit 4–6 weeks runway.
Metrics that keep you honest
Owner Pay Coverage: (OP bucket ÷ next payroll) ≥ 1.5×
Tax Coverage: (TX ÷ projected quarterly estimate) on pace ≥ 100%
Operating Runway: 4–6 weeks
Profit Transfer Rhythm: Quarterly distribution from PF (even if small)
Common objections, solved
“My revenue is lumpy.”
Exactly why you need the buckets. Lumpy revenue requires smooth allocations.“I can’t raise prices right now.”
You can adjust scope and timelines right now. It’s the same as raising your effective rate.“This feels rigid.”
It’s guardrails, not a prison. You can change the split—after you’ve got data.
Resources
IRS EFTPS for quarterly tax payments: https://www.eftps.gov
SCORE cash flow template: https://www.score.org/resource/financial-projections-template
Cash Control Session
Lock in your buckets, your split, and a zero-drama cash cadence in 60 minutes. We’ll map your allocations (Owner Pay, Taxes, Profit, Operating), set your sweep days, and identify the fastest lever to add runway this month.
You’ll walk away with:
A custom allocation split you can implement tomorrow
A 30-minute weekly scoreboard and checklist
One immediate cash win (pricing, scope, or spend cut)
Ready to run your money—before it runs you?