Juice's Growth Hub: Closing the cashflow gap catching out UK SMEs

We had a brilliant night at The Ministry this week, hosting Growth Hub for an evening on the one subject that quietly keeps founders up at night: cash flow. The weather outside was glorious, so we were genuinely chuffed that a full room of SME owners chose to spend it indoors with us instead, with a drink in hand, talking about forecasting, funding and what to do when the money runs short.

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The reason it worked was the panel. We brought together 3 people who see cash flow from very different angles, and all 3 were open about the parts of running a business that usually stay behind closed doors:

• Mark Hinge, a major shareholder at Enjoy Travel and a qualified accountant with more than 25 years as a CFO and CEO across the travel industry.
• Romesh Jeyaseelanayagam, founder of The FD Consultant, a collective of fractional finance directors who walk into businesses every week and find out what is really going on under the bonnet.
• Paula Kumar, Practice Leader in the Disputes team at LegalVision UK, who gets the call when a payment has gone wrong and a relationship has broken down.

A few of their points have stayed with us since.

Profit and cash are not the same thing

The evening's biggest idea came early, and it surprised some of the room. A business can be profitable on paper and still struggle to make payroll.

Romesh explained why. "There's a big difference between profit, which is paper, and cash flow, which is real money going in and out of your bank account," he said. "They are massively different. The key difference is timing." He gave the example of a packaging business he ran that imported stock from the Far East. They paid 50% upfront, waited 3 months for the goods to arrive, stored them, sold them, delivered them, and then gave customers credit terms on top. That is roughly a 5-month gap between money going out and money coming back. The business was profitable the whole way through. It was the timing that created the strain.

If you have ever looked at a healthy profit figure and wondered why the bank balance does not agree, that gap is usually the answer.

You go bust because you run out of cash

Mark put it more bluntly, repeating advice he was given early in his career. "The 3 most important things in your business: number one is cash, number two is cash, number three is cash," he said. "You don't go bust because you're not making profits. You go bust because you haven't got cash."

His fix is discipline, not luck. He runs an integrated model that ties the profit and loss, balance sheet and cash flow together for forecasting years ahead. Alongside it he runs a daily cash flow for the next 3 months, so he knows exactly what is coming in and going out each day. The logic is simple. "If you're 3 months before you know a problem's coming, you've got a chance to do something about it," he said. "If you've got a day or two, you've got no levers to pull anymore."

His other warning was about assumption. Even at the most senior level, do not assume someone else is watching the bank. It does no harm to look yourself.

When a payment goes wrong, act early

Paula sees the cases where it has already gone wrong, and her message was about timing too. By the time a debt reaches her desk, it has usually been quiet for weeks and everyone has started to panic. "It's never really a legal issue for these kinds of matters," she said. "The core issue is communication, because they've not been communicating early enough."

She walked the room through the escalation ladder, because skipping steps can come back to bite you in court. A formal letter of claim signals you are serious and is expected before any proceedings. Debts under £10,000 go through the small claims process, much of it online. For an undisputed debt against a solvent company, a statutory demand has real teeth. Her one piece of prevention that costs nothing today: get your contracts and terms right now, with clear payment and interest clauses, so you are not starting from a weak position later.

She also flagged a line many directors do not know exists. "If a company is getting into financial difficulty, that duty shifts from shareholders to creditors," she explained. Keep trading past that point without advice and you can be held personally responsible for wrongful trading, and as she put it, "you don't even have to have been dishonest." If you are starting to wonder whether you can make payroll, that is the moment to get advice, not after.

Choosing how to bridge a gap

When there is a genuine gap to bridge, the panel agreed there is no single right answer. Mark's rule of thumb was to ask 3 questions before anything else. "You need to know how much you want, how long you want it for, and what the cost is going to be," he said.

For short, seasonal needs, flexible borrowing tends to fit better than a rigid 5-year term loan, where you carry the cost long after the need has passed. For a structural change to the business, equity might be the better route. The skill is matching the tool to the situation, which is exactly where a fractional FD like Romesh earns their keep. As he put it, long-term models are for planning and raising investment, but "cash flow is now and the next few months."

This is the part of the conversation Juice is built for. Juice Flex is a continuous line of credit that works alongside your business, there when a timing gap appears and out of the way when it closes. Subject to status and lending criteria.

The quiet takeaway: you don't have to carry it alone

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Mark closed on something that had nothing to do with spreadsheets. "When things go bad, it can be a very, very lonely place with cash flow problems," he said. "Talk to someone, rather than go home every night and not sleep because the business has got problems." Finance people in particular tend to absorb the pressure themselves, and you will often come away from a conversation with an idea you would never have reached on your own.

That is the whole reason Growth Hub exists. Someone else in the room has almost certainly faced the same thing you are facing, and is happy to help.

Thank you to Mark Hinge, Romesh Jeyaseelanayagam and Paula Kumar for sharing so openly, to everyone who came, and to Katherine and the team for hosting. We will see you at the next one.

This article is general information, not financial advice. Your accountant or a regulated adviser is best placed to advise on your specific circumstances. Subject to status and lending criteria.

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