The Cash Flow Planning Strategy Every Business Owner Needs

At Sum of All Numbers, we’re all about helping business owners move from overwhelm to clarity. The March workshop focused on doing exactly that.

We unpacked one of the most important (and often overlooked) numbers in your business:
What’s the minimum amount of cash you need each month to keep your business running, no matter what?

We call this your Monthly Nut. Once you know it, you can make faster and more confident decisions—both in emergencies and during everyday operations.

**What’s In (and Out) of Your Monthly Nut**

This isn’t about tracking all your expenses—it’s about identifying the costs that continue even when revenue slows down.

Excluded (these turn off when sales stop):

Materials or supplies tied directly to sales
Subcontractor costs
Other variable, project-based expenses

Included (these don’t go away):

Rent and utilities
Payroll
Debt payments
Owner pay (yes, you still need to eat)
Insurance
Software and tools
Required licenses

These are the costs you’ll be responsible for—even if your income drops to zero.

The ABC System: A Smarter Way to Prioritize Expenses

Michelle introduced a clear, behavior-based method to sort your expenses:

A = Absolutely Must Pay
Non-negotiables that keep your business operating
Examples: rent, essential payroll, critical software, insurance
B = Can Keep Going... For Now
You can pause them temporarily, but not forever
Examples: bookkeeping, some software, non-critical insurance
C = Cut Immediately If Needed
Non-essential or forgotten expenses
Examples: meals and entertainment, duplicate subscriptions, office janitor

This system isn’t just for emergency planning—it’s a valuable framework for long-term decision-making, pricing, budgeting, and profitability.

Real-World Example: A $53,000 Monthly Nut

One business owner applied this framework and discovered:

A Expenses: $30,000
B Expenses: $15,000
C Expenses: $8,000
Total: $53,000/month

That clarity made it easier to set real goals, like:

Building a 3-month emergency fund for A expenses = $90,000
Or creating a full 2–3 month cushion for A + B + C expenses

💡 Pro tip from Michelle: Name your emergency fund after someone you love. It creates an emotional connection and makes you less likely to dip into it for non-essential reasons.