Situations · Decisions
When cash is tight, compute your real runway first, then separate spending that buys the future from spending that maintains habit. Three conclusions, common mistakes, three plays.
When cash is tight, the first move is neither raising money nor cutting people. It is computing one number: how many months you can last at the current pace, and how many in the worst case.
Expand or cut depends on runway and revenue certainty. With more than twelve months of runway and a verifiable growth signal, limited expansion is possible. Under six months, cut to the smallest configuration that survives.
Cutting is not trimming everything evenly. It is removing spending that maintains habit while protecting the one path that brings the next certain revenue.
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Treating unsigned contracts as cash. Count only money received and contracts signed.
Twenty percent from every department weakens what earns money together with what does not.
Fundraising, credit, and payment-term negotiations all take time. Starting with three months left leaves no option in reach.
Betting the last of the cash on unverified growth. Sun Tzu's rule is to secure victory first and then fight, not fight first and hope.
Use cash received plus signed and invoiced receivables, divided by current monthly net burn. Then compute a worst case: a major customer pays late and revenue drops 30%.
Sort fixed costs into three kinds: buys certain revenue, buys possible revenue, maintains habit. Cut the third kind first.
Where the next certain money comes from, when, and who it depends on. The people and resources on that path are not to be touched.
The Art of War, chapter 4, Tactical Dispositions
The victorious army wins first and then seeks battle; the defeated army fights first and then seeks victory.
Expanding while cash is tight is fighting first and seeking victory: staking the outcome on growth that has not happened. Sun Tzu wants the conditions for not losing in place first, runway, certain revenue, and reversible commitments, and only then a decision on whether to fight.
Limited expansion is possible, but every expansion spend needs a stop signal and should be released in tranches, never all at once.
Pause expansion, concentrate on the path that brings certain revenue, and start fundraising or credit talks now. Terms today are far better than terms three months from now.
Cut immediately to the minimum viable configuration. Cut habit spending first, renegotiate payment terms second, touch people last. Tell the team the situation and the plan; guessing drains morale faster than bad news.
Give the strategist your cash, monthly net burn, signed revenue, and main expenses. Rough numbers are fine.
The strategist sorts spending into the three kinds and splits any expansion option into tranches that can be stopped.
You leave with one decision for this week: usually one expense to stop, or one negotiation to start.
This page covers the order of judgement. Your own situation, opponent, and resources are worked through with the strategist in the app.
Get the app and run your situationCommon guidance is to keep more than twelve months before considering expansion and to enter cutting mode under six. What matters more is a conservative count: only cash received and contracts signed.
Cut fixed costs that do not bring revenue first: office space, unused tools, non-core outsourcing. People are last, because capability that leaves is hard to bring back.
Only if the expansion brings certain revenue on a timetable, and you can repay even if that revenue falls short. If either condition fails, the loan only extends the same problem.
Yes, and early. They usually already sense it, and silence amplifies guessing. Explaining the situation, the plan, and the reasoning keeps core people better than concealment does.
Decisions · Before taking a project, look at who it will occupy and for how long, and what it leaves behind. Three conclusions, common mistakes, three checks, three plays.
Decisions · When the business is not taking off, pivot or persist is decided by the one piece of evidence that would change your judgement, not by feeling. Three plays.
Decisions · When the team is overloaded, hiring is the most expensive answer. Find the bottleneck and whether it lasts, then choose hiring, outsourcing, or cutting work.
Decisions · When a business line keeps losing money, cut or double down depends on what it still needs and whether the cause can change, not on what is already spent.
This page covers the order of judgement and is not financial, tax, or legal advice. Fundraising, layoffs, and debt restructuring require qualified professionals.