PROFITABLE AND BROKE:

The Start-up Paradox Nobody Warns You About

You closed a huge deal last month. Revenue is up 40% over last year’s. Your team is celebrating. And yet, somehow, you’re staring at your bank balance wondering how you’re going to make payroll next week.

If that sounds familiar, welcome to one of the most distressing paradoxes in business: you can be growing fast and going broke at the same time. It happens to profitable companies. It happens to companies with a full pipeline and a logo wall full of happy customers. It happens more often than most founders want to admit, and it’s rarely talked about until it’s an emergency.

I recall some good businesses that I built in my early years, they had excellent structures, staff brimming with ideas and enthusiasm, and glowing records of patronage. But they just could not survive. They were profitable on paper but needed me to wade in again and again to assist with staff salaries or pay off high volume vendors. It was a perplexing problem and I started thinking that perhaps I had been too trusting with my managers. I later realised that the businesses were not suffering from mismanagement but from cash crunch.

Here’s the truth every entrepreneur eventually learns, usually the hard way: revenue is an opinion, cash is a fact. Revenue tells you what you’ve earned on paper. Cash tells you what you actually have at hand to pay staff salaries, your vendors, and your rent. When the numbers for revenue and cash drift too far apart, that’s when businesses die — not because they weren’t profitable, but because they ran out of cash before the profits showed up in the bank.

The good news is that cash flow problems are mostly predictable and almost always solvable, if you catch them early enough.

Let’s talk about how.

Why Profitable Companies Go Under

This isn’t theoretical. Studies on small business failure consistently point to cash flow mismanagement as one of the top reasons companies shut down — not lack of demand, not bad products, but simply running out of money at the wrong moment.

The mechanics are simple once you see them. You make a sale in January. Your customer pays net-60 (60 days within which to pay up), so the cash doesn’t land until March. Meanwhile, you paid your supplier upfront in December, you’re covering payroll every month, and your software subscriptions renew annually in January. On paper, January was a great month. In your bank account, January was terrifying.

This is the timing gap, and it’s the single most dangerous thing in a growing business. The faster you grow, the wider that gap tends to get, because growth usually means spending more today to earn more tomorrow.

Start With Visibility

You can’t manage what you can’t see. The single highest-leverage thing you can do this week is build a rolling 13-week cash flow forecast. Not a five-year model with hockey-stick projections — a simple, honest week-by-week view of cash in and cash out for the next three months.

List every expected inflow: customer payments, funding, loan proceeds. List every expected outflow: payroll, rent, vendor payments, loan repayments, taxes. Update it weekly. This one habit turns cash management from a source of anxiety into a solvable math problem. You’ll see the tight weeks coming instead of discovering them the morning you can’t make a transfer.

Most founders who get blindsided by cash crunches weren’t blindsided because the problem was unforeseeable. They were blindsided because they were looking at their P&L instead of their cash position.

Speed Up What’s Coming In

Once you can see the problem, you can attack it from both directions. On the inflow side, the goal is simple: get paid faster and get paid more predictably.

Start with your invoicing terms. If you’re offering net-60 out of habit rather than necessity, ask yourself why. Shortening terms to net-30, or even offering a small discount for early payment, can meaningfully close your timing gap. A 2% discount for payment within 10 days sounds small, but it’s often cheaper than a short-term loan and it trains customers toward faster payment behaviour.

Invoice immediately, not “at the end of the month when we get around to it.” Every day an invoice sits unsent in your office, is a day of interest-free credit you’re extending to your customer without meaning to. Automate your invoicing and follow-up reminders so collections aren’t dependent on someone remembering to chase people down.

For larger contracts, consider requesting deposits or milestone payments instead of a single payment at project completion. Getting 30-50% upfront doesn’t just help cash flow — it also filters out customers who are not serious.

Don’t be hesitant to actually call your slow payers. A friendly, direct phone call outperforms an automated email reminder almost every time. Most late payments aren’t malicious; your customers just think yours can be managed while they handle other people’s ‘urgent’ payments. Make them understand that yours should be on the priority list.

Slow Down What’s Going Out

On the outflow side, the same logic runs in reverse: stretch your payment timelines wherever you reasonably can, without damaging important relationships. Negotiate longer payment terms with your suppliers, especially the ones you’ve worked with the longest and paid reliably. Many vendors would rather extend you 45 or 60 days than lose you as a customer, but they’ll never offer it — you have to ask. This is a conversation, not a confrontation.

Look hard at your recurring expenses. Subscription creep is one of the quietest cash killers in modern business. Software tools, memberships, and services accumulate over time, and nobody audits them until cash gets tight. Do that audit now, before you’re desperate, and cancel anything that isn’t earning its keep. Time your big purchases deliberately. If you know a slow season is coming, don’t buy equipment or sign new leases right before it. Match your major outflows to your cash-rich periods, not your optimism.

Build a Buffer Before You Need One

The businesses that survive a rough quarter aren’t the ones with the best quarter — they’re the ones with a cushion built before the rough quarter arrived. A cash reserve, even a modest one covering four to six weeks of operating expenses, changes everything about how you make decisions. It’s the difference between negotiating from strength and negotiating from panic.

If you don’t have a reserve yet, start treating it like a fixed expense. Set aside a small, consistent percentage of revenue every month, the same way you’d pay rent. It won’t feel meaningful at first. Eighteen months later, it would be the reason you can survive a client who suddenly defects or a slow quarter that catches everyone off guard.

Know Your Financing Options Before You Become Desperate

There’s a world of difference between arranging a line of credit while your business looks healthy and trying to arrange one while you’re two weeks from missing payroll. Lenders and investors can smell desperation, and it shows up in worse terms, slower approvals, and less negotiating power. Build real relationships with your bankers before you need favours. A banker who has watched your business operate responsibly for two years is far more likely to work with you through a rough patch than one you’re meeting for the first time in a crisis. If you have receivables from reliable customers, invoice factoring or financing can convert those future payments into cash today, at a cost, but sometimes that cost is far cheaper than the alternative of missing an obligation.

Set up a business line of credit when you don’t need it. Think of it as a financial fire extinguisher; you hope you never use it, but you want it mounted on the wall before the fire starts, not while the kitchen is already burning.

Cut Early, Cut Once

When a cash crunch does hit, the instinct is often to make small, incremental cuts and hope things improve. Resist that instinct. Death by a thousand small cuts is demoralizing and rarely solves the actual problem fast enough. If you need to reduce costs, make one decisive, sufficient cut rather than three reluctant ones spread over three months. It’s harder in the moment, but it preserves trust with your team and gives the business a real chance to stabilize instead of just delaying the reckoning.

In conclusion, none of this is about being pessimistic or obsessing over worst-case scenarios. It’s about recognizing that cash flow discipline is what buys you the freedom to actually pursue growth on your own terms, instead of being controlled by your bank balance.

Revenue proves that people want what you’re selling. Cash flow proves you’ll be around long enough to keep selling it to them. Master the second one, and the first one gets a lot easier to enjoy.

Cheers!!

Fatherhood with Ibe 

I ONCE MET A MAN … Who Thought Fatherhood Could Wait

(Part One)

There are people you meet who disappear from your life within minutes, and there are those who leave fingerprints on your thoughts for decades. Many times, the stories, ideas and lessons that I share on this page are not things that happened to me but outcome of my interactions with people or stories shared by them. I have decided for the next couple of editions, to share stories and lessons from my encounter with people. I have titled this the I ONCE MET A MAN series. I am hoping that through the wisdom or poor judgement of these fellows, we can all learn lessons and adjust where necessary. So, here we go … the Part One!

Many years ago, during one of my business trips to an East African country, I met a man whose name I can no longer remember. Yet I remember his face, his voice, and one statement he made, as though I had heard it yesterday.

“I’ll have plenty of time for my children after I retire.”

At the time, he was in his early forties, energetic, ambitious and obviously upwardly mobile. His phone never stopped ringing. Every few minutes another client, another supplier, another employee demanded his attention. He was the sort of man many people admired; expensive suit, sharp shoes polished to gleaming perfection, firm handshake and a confident smile. He was building an empire, or so he thought.

We shared several hours together, and somewhere between discussions about business opportunities and economic policies, our conversation drifted toward family. One other man with us, Kene, wondered how I found time to run my businesses and still pay attention to my family. He said he found himself constantly sacrificing one for the other. Our new friend jumped in enthusiastically. He said that family was paramount to him. He said he was doing all he was doing for his family, describing his children as the heartbeat of all his efforts.

He showed me photographs of his children, four adorable looking kids.

“They’re growing fast,” he said proudly.

I smiled.

“How old are they now?” I asked.

He answered.

Then I asked another question.

“What games do they enjoy playing with you?”

He paused.

“I’m usually busy.”

I wanted to point out a lapse that many ambitious fathers overlook, so I kept asking questions.

“What subjects do they struggle with in school?”

“I think my wife handles that.” He said, after an awkward silence.

“Who is your son’s best friend?”

Silence.

“What worries your teenage daughter these days?”

A longer silence.

Finally, he laughed awkwardly.

“I honestly don’t know.” He then told me that he would have time for the kids when he retired.

He wasn’t a bad man nor was he an irresponsible father. He simply believed that providing money was the same thing as providing fatherhood. Many of us men were raised to believe exactly that. Our fathers worked hard because life demanded it. They fought poverty, inflation, unemployment and uncertainty. Many left home before sunrise and returned after dark. They sacrificed comfort so their families could survive.

We honour that generation.

But somewhere along the line, many of us misunderstood the assignment. Provision became the destination instead of the vehicle. We became experts at earning a living while slowly forgetting how to build relationships.

Years later, I met that same gentleman again, in his country, in Ghana. This time, there was instant recognition. His hard work seemed to have paid off; wealth sat easily on him. His business had become much larger. His house was magnificent and in the part of the city that told you a story before any was offered. The car he drove was a limited edition. But something seemed wrong; there was a heaviness that sat physically on his shoulders despite the obvious business success.

I asked about his children and he gave a generic response at first; he said they were doing well and told me their academic achievements. Then, after a beat, he told me that he had read some of my articles about my children and parenting in general. He said that as his business grew, he seemed to have lost touch with the original motivation.

“I started the whole elaborate business plan to give my children a great life, to fund holidays together and to retire early and focus on them. Now, I don’t know. I seem to be working for the business instead of for myself. I can’t look away for one minute because there’s always something pending. You should know what I am talking about.” He said, seeming frustrated. I nodded quietly.

“I thought I would have time to bond with them but they are growing up so fast. They don’t come to me for anything except financial needs. I once tried to initiate conversation about who their friends were and what they were struggling with. My children looked at me as though I was a stranger prying into their lives. ‘I already spoke with Mum,’ is the recurrent phrase in my home.”

I understood perfectly. His children went to their mother, their friends and sometimes to complete strangers, with their problems. It didn’t mean that they did not respect their dad or appreciate everything he had sacrificed to give them a comfortable life. But, they did not really know him. And, even more painfully… he did not really know them.

That conversation stayed with me because I realised something every father eventually learns: Children do not simply need your provision. They need your presence.

Money can buy a better mattress for them. It cannot buy bedtime conversations or that loving hand that pulls up the duvet to cover them. Money can pay school fees. It cannot answer difficult questions about friendship, disappointment or self-worth. It cannot replace the strong voice that builds their confidence and tells them they are the best. Money can purchase birthday gifts. It cannot replace laughter over dinner.

When my own children were growing up, I was not a perfect father … far from it. Business demanded long hours. Meetings multiplied as my commitment grew. Travel became frequent. Deadlines ignored birthdays. Clients seemed more urgent than school plays. Like many fathers, I occasionally convinced myself that I was doing all this for the children. And to some extent, I was. But children rarely measure love by the number of hours you worked. They measure it by the moments you shared.

The older I become, the more I realise that memories are built from surprisingly ordinary events: A walk to the neighbourhood shop, a scenic drive around town, fixing a broken bicycle together, watching football or other games together even without saying much, teaching a son how to shake hands confidently, listening to a daughter explain why her best friend upset her. These moments appear insignificant while they are happening. Years later, they become priceless.

I have now become a grandfather. That title changes the way you observe life. Grandchildren have a wonderful habit of slowing you down. They ask questions that adults no longer ask. Why is the moon following us? Why do old people smile so much? Can birds get tired? They remind us that relationships are built through curiosity, patience and time.

Ironically, these are the very things modern fatherhood often sacrifices.

Our generation faces challenges my father never imagined: Mobile phones compete for our attention, emails follow us home, social media convinces us that everyone else is succeeding faster.

Even when fathers are physically present, many are mentally somewhere else.

A child notices. They always do.

Children know when they are competing with a laptop. They know when they are competing with business calls. They know when they are competing with notifications. They may never complain but they quietly adjust. Eventually they stop interrupting. Then they stop asking. And, one day they stop coming altogether. That transition rarely happens overnight. It happens one postponed conversation at a time – one cancelled outing, one forgotten promise, one distracted dinner, until the distance becomes normal.

This is why I often tell younger fathers this: Never assume there will be a better season for fatherhood.

Life keeps moving the goalposts. First you are building your career. Then you start expanding the business. Next you are working harder to pay tuition for a good university. Then, you start preparing for retirement. And finally, your only real shot at being a father is as a grandfather.

If you wait until life becomes less busy, fatherhood will always remain tomorrow’s project. But children grow today. The little boy who wanted to hold your hand today may no longer want to tomorrow. The little girl who wanted your opinion may soon begin asking someone else. Time has a way of making decisions on our behalf.

As I reflect on nearly seven decades of life, I have discovered something that business taught me surprisingly well. Every worthwhile investment requires consistency; you cannot invest once and expect lifelong returns. The same principle applies at home: Fatherhood is not built during grand celebrations; it is built on ordinary Tuesdays, over ordinary breakfasts, through ordinary conversations while enjoying ordinary drives to school. These ordinary days eventually become extraordinary memories.

The gentleman I once met all those years ago confessed something that has remained with me.

“I thought I was giving them everything. I never realised they wanted me more than what I was bringing home.”

Those words have echoed in my heart ever since because every father eventually discovers one unavoidable truth: Children eventually forget many of the gifts you bought. They rarely forget how you made them feel. Perhaps that is the greatest investment a father can ever make. Not simply building a successful career but building children who always know where home is whenever life becomes difficult.

Next publication, I’ll tell you about another man I once met, one who had very little money, but whose children became his greatest legacy. His story completely changed the way I measure success as a father. See you then!