Table of contents
You have a great business idea. You have customers. You even generate revenue. And still your startup goes bankrupt. How can that be?
The answer is shockingly simple: liquidity problems. It's not the bad idea that brings most founders down. It's the missing cash in the bank - exactly when you need it.
1. The Problem: Founder Killer Number 1
Imagine: you just landed a big contract. 10,000 euros in revenue. Sounds great, right? The problem: your customer only pays in 60 days.
But your bills? They come on time. Rent on the 1st. Salaries on the 15th. The supplier invoice after 14 days.
The money comes too late. The bills come on time.
This is the deadly liquidity gap - and it has destroyed more startups than any competitor.
Hard reality
Studies show over 80% of all startups fail due to cash flow problems - not from lack of demand or bad products. Most would have survived with better planning.
2. What is a liquidity gap?
Liquidity means: do you have enough money in the bank to pay your bills right now? Not next month. Not when the customer pays. Right now.
A liquidity gap occurs when:
- Revenue arrives later than planned
- Expenses come earlier than expected
- Large investments drain the account
- Customers don't pay or pay late
- Seasonal fluctuations were not accounted for
A typical example
| Month | Revenue | Expenses | Balance |
|---|---|---|---|
| January | 5.000 Euro | 8.000 Euro | -3.000 Euro |
| February | 7.000 Euro | 8.000 Euro | -4.000 Euro |
| March | 12.000 Euro | 8.000 Euro | 0 Euro |
| April | 15.000 Euro | 9.000 Euro | +6.000 Euro |
Overall the startup is profitable. But money is missing in January and February. Anyone who can't bridge this gap goes bankrupt - even though the business itself works.
3. Why liquidity matters more than profit
Many founders focus on revenue and profit. That's important - but not the most important.
Profit
Shows whether your business model works long-term. Calculated on an annual basis.
Problem: You can be profitable and still have no money in the bank.
Liquidity
Shows whether you can still pay your bills tomorrow. Viewed on a daily/weekly basis.
Advantage: You see immediately when things get tight - and can act.
Key takeaway
"Profit is an opinion, liquidity is a fact." You can calculate yourself poor and be rich - or calculate yourself rich and have no money.
4. Building a liquidity plan: step by step
A liquidity plan is easier than you think. For every month it shows you: how much money comes in, how much goes out, how much is left?
Record opening balance
How much money do you have in the bank right now? That is your starting point.
Plan revenue
When does which money arrive? Account for your customers' payment terms (30, 60, 90 days). Be realistic - better pessimistic.
List expenses
All fixed costs (rent, salaries, insurance) and variable costs (materials, marketing). When do they come due?
Calculate balance
Revenue minus expenses for every month. The closing balance of one month is the opening balance of the next.
Identify shortfalls
Where does the account go negative? Those are your liquidity gaps. Now you can act before it is too late.
5. The most important liquidity KPIs
Every founder should know these three numbers:
| KPI | What it shows | Target value |
|---|---|---|
| Liquidity reserve | How many months can you survive without revenue? | At least 3 months |
| Burn Rate | How much money do you "burn" per month? | Keep as low as possible |
| Runway | How long will your money last? | At least 6-12 months |
Calculating runway
Runway = bank balance / monthly burn rate
Example: 30,000 euros in the bank, 5,000 euros burn rate = 6 months runway.
6. Practical tips to secure liquidity
- Send invoices immediately: Don't wait until the month is over. The earlier the invoice goes out, the earlier the money comes in.
- Shorten payment terms: Offer a 2% discount for payment within 7 days. That motivates quick payers.
- Request down payments: For larger orders, agree on a 30-50% down payment.
- Build a dunning process: Friendly reminders after 3 days, dunning letters after 14 days. Automated.
- Delay expenses: Use payment terms with suppliers - but pay on time.
- Plan a buffer: At least 20% reserve for the unexpected.
- Consider seasonality: In good months build reserves for weaker months.
Biggest mistake
Planning too optimistically. Every founder thinks: "In my case it will be better." The reality: it always takes longer and costs more. Plan pessimistically - and be positively surprised.
7. Free: calculate liquidity with MiraSmart
You don't want to calculate your liquidity in Excel? Understandable. With MiraSmart Finance you build your liquidity plan in just a few minutes - free and without registration.
What MiraSmart Finance offers:
- Automatic calculation: Revenue, expenses, balance - all calculated
- Visual presentation: See at a glance where things get critical
- Run scenarios: Best case, worst case, realistic
- Bank-ready export: PDF for bank, employment office or investor
- No registration required: Start immediately, use for free