CASH GAP PLAN

November 10, 20253 min read

Revenue Does Not Mean Cash. And Cash Is the Lifeline. Your Cash Gap Plan Is the System That Keeps Your Business Breathing.

There is a painful moment every business owner eventually faces:

You sell the work.
You deliver the work.
Your customers are happy.
Revenue is recorded.
The business looks successful on paper.

But your bank account says something very different.

This is the Cash Gap.

It is the time delay between:

  • When you pay your expenses (now)

  • And when you actually receive payment (later)

The wider the gap, the greater the stress.
And when the Cash Gap widens too far, even profitable businesses can collapse.

Not because they didn’t sell enough.
Not because they didn’t deliver value.
But because cash did not arrive fast enough to support operations.

A Cash Gap Plan is the system that protects the business from suffocation.
It ensures that money flows through the business in a way that supports stability, payroll, investment, and growth — instead of creating panic.

Cash flow is not a financial detail.
It is the emotional foundation of the business.

When cash is tight, every decision is influenced by fear.
When cash is stable, every decision can be strategic.


How the Cash Gap Appears in Real Businesses

The Cash Gap shows up when:

  • The business waits too long to invoice

  • Customers are allowed to pay late

  • Projects require upfront costs before payment arrives

  • The business carries too high a labor or material float

  • Payment terms are too generous

  • Expenses are not aligned with revenue timing

And the danger is this:
The owner tries to solve the cash gap with effort — not systems.

They push harder.
Sell faster.
Work longer.
Take on more projects.
Sacrifice themselves even more.

But the problem is not effort.
The problem is timing.

The Cash Gap must be engineered out, not worked through.


The Cash Gap Plan Has Three Levers

1. Get Paid Earlier

This means restructuring how revenue is collected:

  • Deposits upfront

  • Milestone-based billing

  • Subscription or retainer structures

  • Shortened payment terms

  • Auto-pay agreements

Businesses are afraid to ask for upfront payment because they think:

“Will this scare the client away?”

But the reality is:
Professionals set terms. Beginners negotiate against themselves.

2. Pay Out Later

This does not mean delaying payments unfairly.
It means managing commitments responsibly:

  • Negotiating terms with suppliers

  • Aligning payment cycles with revenue cycles

  • Structuring payroll timing

  • Avoiding large purchases without clear ROI timing

Cash is not just about income —
it is about timing alignment.

3. Reduce Cash Required to Deliver

This is about efficiency:

  • Standardized delivery processes

  • Inventory control

  • Removing unnecessary rework

  • Eliminating “custom everything”

  • Improving labor utilization

Businesses don’t fail from lack of demand.
They fail from cash starvation.

The Cash Gap Plan prevents starvation — permanently.


Your Coaching Assignment

Ask yourself:

  • Do we invoice on time?

  • Do we require upfront deposits?

  • Do clients have predictable payment schedules?

  • Are we carrying expenses too early?

  • Are we paying ourselves last instead of first?

Then choose ONE Cash Gap improvement and implement it within 7 days.

Even a small shift can change your stress level dramatically.

This is one of the most emotionally freeing systems in the business.

Eric Dombach is an investor, entrepreneur, senior executive, and consultant to PE firms and family offices. He has founded two professional service firms that achieved 7-figure exits. As the leader of a business consulting firm and a network of more than 6,300 business consultants, Eric is dedicated to developing leaders, building dream teams, and growing SMBs. He is also a published author, known for his Amazon best-seller, "The Million Dollar Business Coaching Firm." Eric has an MBA from the University of the People and a B.S. in Engineering from Messiah University. He has been married to Deborah since 1993, and they have four adult children. He enjoys reading, world travel, and playing jazz-fusion guitar.

Eric Dombach

Eric Dombach is an investor, entrepreneur, senior executive, and consultant to PE firms and family offices. He has founded two professional service firms that achieved 7-figure exits. As the leader of a business consulting firm and a network of more than 6,300 business consultants, Eric is dedicated to developing leaders, building dream teams, and growing SMBs. He is also a published author, known for his Amazon best-seller, "The Million Dollar Business Coaching Firm." Eric has an MBA from the University of the People and a B.S. in Engineering from Messiah University. He has been married to Deborah since 1993, and they have four adult children. He enjoys reading, world travel, and playing jazz-fusion guitar.

LinkedIn logo icon
Instagram logo icon
Back to Blog