How Long Do You Have Until You're Out of Cash?
As a creative agency owner, managing cash flow is one of the most critical aspects of staying in control of your business’s future. And one key metric that every business owner should understand is their Cash Burn Rate.
So what is it? Cash burn rate is the speed at which your agency is spending money—essentially, how fast you’re “burning” through your cash reserves. Ideally, you aren’t burning cash at all. Instead, you want to be adding to your reserves each month, not depleting them.
This is a key area we monitor for our CFO clients. If a company’s burn rate is too high, they risk running out of cash and facing financial instability. If it’s too low, they may be missing out on opportunities to invest in growth. Striking the right balance is key.
How to Keep Your Cash Burn Rate in Check
Cut Unnecessary Costs – Audit your expenses regularly and eliminate anything that isn’t driving revenue or efficiency.
Tighten Up Invoicing – Ensure you have clear payment terms and a system in place to collect payments on time.
Explore Retainers – Recurring revenue helps stabilize cash flow and reduces unpredictability.
Right-Size Your Team – Too many hires drain cash, while too few limit your ability to take on new work and grow.
Diversify Income Streams – Consider expanding your services or tapping into new markets to reduce dependency on one revenue source.
The Best Way to Manage Your Cash Burn Rate
My personal favorite strategy? Hire a CFO (aka, us 😉). A CFO will monitor and advise on your finances, catch cash flow issues before they become problems, and help you make smarter, more profitable decisions. We ensure you’re spending wisely, pricing strategically, and keeping more cash in your business—so you can focus on growth instead of financial stress.
If you want expert financial guidance to keep your agency profitable and growing, inquire [here] to learn more and see if we’re a good fit.
Let’s make your money work for you!
