The Butterflies Before Payroll: Small Business Cash Management
The Butterflies Before Payroll: Small Business Cash Management
For years I was profitable on paper but nervous every payroll week. Here’s how small business cash management and structured cash flow ended the butterflies.
The Butterflies Before Payroll: Small Business Cash Management and the End of Bad Surprises
Payroll debit is Friday.
Sales tax from last month — 9.75%, every dollar owed — is due Monday.
Rent isn’t far behind.
I open the banking app.
There used to be a pause right there. A tightening in the chest. Not panic. Just the quiet possibility of a bad surprise.
The P&L said we were profitable.
But profit lives on paper. Cash lives in time.
And time doesn’t always cooperate.
Receivables drift in when they feel like it. Vendors wait, until they don’t. Payroll never blinks. The state definitely doesn’t blink.
Some weeks everything stacked up at once.
Payroll.
Sales tax.
Rent.
Nothing catastrophic ever happened.
That was the strange part.
We were growing. We were profitable. And still, every login felt like opening a test I hadn’t fully studied for.
It took me years to understand that profitability and small business cash management are different skills.
One tells you whether your business works.
The other tells you whether you can sleep.
Cash Flow Management for Small Business Is About Constraint
The breakthrough wasn’t dramatic. It was humbling.
A business will consume whatever you feed it.
If you leave all the revenue sitting in one operating account, it will get used. Not recklessly. Not maliciously. Just naturally. Expenses expand. Decisions loosen. The money finds a home.
So the solution wasn’t more hustle.
It was feeding it less.
That’s when I read Profit First by Mike Michalowicz and built structure around it.
Once a week, I log into the bank and enter the balance of the Income account into a spreadsheet. The percentages are predetermined.
From there, the money gets distributed deliberately.
For me, payroll is nearly 50%. That covers wages, payroll taxes, and the tips we collect from our clients for our team. In catering, labor isn’t optional. It’s the engine.
Sales tax gets its share.
Operating gets its share.
Loan payments get theirs.
Savings gets fed.
Profit gets something — even if it’s small.
The percentages are decided before the week’s emotions show up.
The Toothpaste Principle
Think about a brand-new tube of toothpaste.
You squeeze without thinking.
When you’re down to the last inch, everything changes. You roll the tube. You press carefully. You conserve.
Same toothpaste.
Different behavior.
When all our revenue lived in one account, we behaved like we were at the top of the tube.
When we separated it — payroll in one place, sales tax in another, profit in its own quiet corner — the business began behaving like we were at the bottom.
Constraint sharpened decisions.
Not loudly.
Quietly.
What Changed
The outside world didn’t change.
Clients didn’t suddenly pay faster.
Revenue didn’t double overnight.
But the login screen did.
Now when payroll debit hits Friday, it hits.
When the 9.75% is due Monday, it’s waiting.
When rent clears, it clears.
I don’t negotiate with the number on the screen anymore.
Eventually, profit accumulated in its own account.
Real profit. Not the kind that disappears into operating expenses the following week.
And I used some of it to build something I’d wanted for years — my stereo and turntable downstairs.
It’s now the centerpiece of my listening sanctuary at home — something I wrote more about in Creating a Sanctuary at Home.
Small business cash management isn’t about squeezing every dollar.
It’s about deciding where every dollar goes before the business decides for you.
The butterflies didn’t disappear because revenue exploded.
They disappeared because the business stopped eating everything.
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I used to dread walking through the doors of the business I built. Now, I get to write bonus checks with pride—and sleep at night. Here’s how we turned a barely-surviving mess into something solid, sustainable, and worth showing up for.
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