BY PHIL SHETSEN
You didn’t start your business just to survive month to month—you started it to create financial freedom with more control to ensure a better future for you and your family.But that dream doesn’t just happen. For most small business owners, the key to making that dream real is mastering cash flow—and I don’t mean by just staying afloat but using every dollar strategically to create lasting personal wealth.
This guide is about more than business finances—it’s about turning your hard work into long-term security and opportunity. Here’s how to get there.
Fixed vs. Variable: The Cash Flow Fundamentals
If you want control over your money, start with clarity around your expenses. It’s important to be honest here.
❱ Fixed expenses are the recurring, predictable costs that don’t change much such as rent, insurance, salaried wages, and loan payments. These form your baseline.
❱ Variable expenses shift with activity. Think inventory, shipping, utilities, and seasonal or freelance labor. These rise and fall as your sales and demand do.
Understanding the difference helps you forecast accurately. Fixed costs anchor your baseline; variable costs give you flexibility—but also demand vigilance. Managing both effectively is step one in protecting your cash position.
Forecast First: Projecting Expenses & Funding Your Reserve
Think of forecasting as your business’s GPS: It helps you navigate challenges and spot opportunities before they’re obvious.
Start by projecting your revenue and expenses across the year. Then, build a reserve fund that covers at least 2-3 months of fixed expenses. This buffer gives you breathing room, reduces stress, and lets you respond to opportunities without borrowing at high interest.
If your business is seasonal or vulnerable to market swings, consider padding that reserve further. Cash on hand = flexibility.
Don’t Go It Alone: The Case for a CFO or Fractional CFO You don’t need a massive business to benefit from strategic financial help. A fractional CFO, a part-time and contracted financial expert, can help you:
❱ Forecast expenses and plan capital spending
❱ Track critical financial KPIs
❱ Improve margins and profitability
❱ Connect day-to-day spending to long-term goals
This is a good option if your business is smaller and looking to scale, but do not have enough revenue to justify the cost of adding to the executive team.
A good CFO, whether fractional or full time, doesn’t just look at the books; they also help you make smart decisions under pressure and avoid financial blind spots that could cost you later. Because transportation is so specialized, it does help to work with someone who understands the nuances of the industry, especially the seasonal fluxes.
The Quarterly Review: Check Profitability, Plan Taxes
Set a quarterly habit to review your books, assess profitability, and plan your taxes.
Meeting with your CPA every quarter helps you:
❱ Avoid IRS penalties by managing estimated tax payments
❱ Understand what’s truly available to reinvest or withdraw
❱ Make informed decisions about distributions, bonuses, or capital improvements This cadence builds discipline and keeps your finances aligned with your growth plans.
What to Do With Surplus Cash
After funding your reserve and covering taxes, your business may have surplus cash. That’s a win—but what you do with it determines whether you grow or stall.
Ask yourself:
❱ Are there high-ROI projects worth funding?
❱ Would new equipment, tools, or marketing pay for themselves in the near term?
If not, don’t just let that money sit. Consider a strategic withdrawal—moving funds from your business into personal investments. It’s a reward for discipline and a step toward financial independence.
Take Chips Off the Table: Building Personal Wealth
Too many entrepreneurs keep 100% of their wealth tied to the business. That’s risky.
At a certain point, it’s time to shift gears—not away from growth, but toward personal financial independence. That might include:
❱ Contributing to a retirement plan
❱ Building a family emergency fund
❱ Investing in stocks, real estate, or other non-business assets
Taking profits is not about “cashing out.” Rather, it’s about protecting what you’ve built—and securing your future.
Why This Matters in 2025
The current economic landscape is unpredictable: costs are up, capital is tight, and consumer behavior is shifting. Even so, many small businesses are still generating solid revenue and continuing to grow. But revenue alone doesn’t build wealth; liquidity, planning, and discipline do.
By actively managing your cash flow, building reserves, preparing for taxes, and knowing when to reinvest or withdraw, you gain a true competitive edge—one rooted in sustainability, not just scale.
Final Word Cash flow isn’t just math, it’s the heartbeat of your business and the gateway to personal freedom.
So forecast wisely. Build your reserves. Lean on trusted financial partners. And when the moment is right, pay yourself—not just for your hard work, but for your future. Because the goal isn’t just to run a profitable business, it’s to turn your business into real, lasting wealth. [CD0625]
Phil Shetsen is the president of Bona Vita Benefits. He can be reached at
