NP Capital: The 5 Steps Every Founder Should Take When Cash Flow Gets Tight
- NP Capital Advisors Team
- 6 days ago
- 8 min read
Newsletter article summary: Founders facing cash crunches must act fast to model cash flow, prioritize payments, communicate, accelerate collections, and drive outcomes. NP Capital Advisors helps founders stabilize, extend runway, and unlock strategic outcomes, even when time is short.
The NP Capital difference combines consulting with transactional advisory to elevate outcomes. We unite real-world business-building experience, deep sector knowledge, and transactional acumen to deliver superior results.
When Cash Flow Gets Tight: 5 Critical Steps Every Founder Should Take
In today’s capital environment, even growing companies with strong revenue can find themselves in a dangerous cash position. Consumer brands, particularly in capital-intensive categories like CPG and wellness, are especially vulnerable. As working capital gets tied up in inventory and accounts receivable, even profitable businesses can face a liquidity crunch that threatens their survival.
At NP Capital Advisors, we specialize in helping founders navigate these critical moments. In recent months, we’ve worked with companies that came to us with only days of cash remaining. In one case, we extended the runway from two weeks to over three months, which was long enough to execute a successful asset sale to a strategic buyer. According to our founding partner, Nick Desai, that kind of turnaround is possible when founders act fast.
“The biggest mistake we see,” Nick explains, “is that people reach out when the business is already on life support. The earlier you intervene, the more options you have.”
So, what should founders do when they’re worried about cash? Here are five critical steps, based on real-world turnarounds.
1. Build a 13-Week and 12-Month Cash Flow Model
Your P&L won't save you in a liquidity crunch. You need a real-time view of what cash is coming in, what’s going out, and when. That means building a detailed, rolling 13-week and 12-month cash flow forecast.
“We call this your early warning radar,” Nick explains. “It’s the only way to actually see your runway, and it’s the first thing we build when we’re brought in.”
This model should track payments vendor by vendor, and receipts customer by customer. Founders often discover they’re spending money on things they could delay and missing collections they could accelerate.
2. Triage Payments: Who Gets Paid, Who Waits
Once you understand your cash flow reality, you need to make tough, strategic decisions about outgoing payments.
“Think of it like your personal budget,” Nick says. “You pay your mortgage and health insurance no matter what. The gardener can wait – you can live with an unmowed lawn for a few months.”
In a business context, that means identifying mission-critical vendors, while other payments may be paused, renegotiated, or restructured.
With a distressed wellness brand, we helped the founders categorize every payment and reached out to essential suppliers with revised payment plans. By leading those conversations proactively, the company maintained operations even while delaying non-essential outflows.
3. Proactively Communicate With Vendors and Creditors
When cash gets tight, going silent is the worst thing a founder can do. Delaying payment without explanation can permanently damage relationships and accelerate a downward spiral.
“Founders sometimes take the ostrich approach – bury their heads and hope no one notices,” says Nick. “That never works. You need to get on the phone.”
By proactively communicating with vendors, lenders, and landlords, we helped the wellness brand maintain trust, even while delaying payments. Most vendors were flexible once they saw there was a plan and a point of contact.
In many cases, this kind of transparency buys time. And time buys options.
4. Accelerate Collections and Unlock Internal Liquidity
While you’re managing what goes out, don’t forget what’s supposed to be coming in. Too many companies let invoices sit unpaid simply because no one is following up.
“We often find six or seven figures worth of cash stuck in accounts receivable,” Nick notes. “It’s amazing how much you can unlock just by asking.”
We’ve helped accelerate collections from major retail accounts. In some cases, it was as simple as having the CEO personally request faster payment.
The team also took a fresh look at internal assets, from excess inventory to unused credit facilities, to squeeze every ounce of short-term liquidity out of the business.
5. Stabilize and Drive Toward a Strategic Outcome
Once runway is extended and the business is stabilized, the next step is executing a strategic plan, whether that’s raising capital, executing a bridge loan, or selling the company.
“This is where most founders wait too long,” says Nick. “They want to raise money or sell, but they’ve only got two weeks left. That’s not enough time to do either well.”
In the wellness brand case, we created 3.5 months of extended runway to position the company for a sale. That’s the difference between life and death. Within six weeks, the company’s assets were sold to a strategic acquirer, preserving jobs, vendor relationships, and shareholder value that would have otherwise been lost.
Creating more time was everything. Without that initial cash flow triage and vendor strategy, there would have been no deal to pursue.
Final Thoughts
The path from liquidity crunch to strategic exit isn’t easy, but it is navigable, especially when action is taken early.
“Hope is not a plan,” Nick says. “But a real plan creates hope.”
At NP Capital Advisors, we specialize in helping founders through these critical transitions: stabilizing operations, extending runway, and guiding them toward capital or exit solutions that protect the value they’ve built.
If your instincts are telling you it’s time to take a hard look at cash flow, don’t ignore them. Start modeling. Start communicating. And if needed, bring in experienced help before options run out.
“Give us three months,” Nick adds, “and we can work wonders. Give us one week, and we’ll fight to buy you more time, but try not to wait.”
Deal Announcement
NP Capital advised a leading health and wellness company on a rapid restructuring and sale process. The sale aligns with the company’s mission to create a comprehensive ecosystem for health, recovery, and vitality. The new partnership positions the company to deliver integrated wellness solutions in a competitive market and on a global scale.
New Team Member
We’re excited to welcome Abe Kamarck to the NP Capital Advisors team!
Abe Karmak
"The Pilot"
Managing Director, Food & Beverage
A native of Washington, D.C., Abe grew up with Southern Italian cooking on his mom’s side and Southern Virginian cooking on his Dad’s side. Both his parents worked and were often gone, so Abe learned his way around the kitchen and cemented his love of cooking and food at an early age. After graduating from Vanderbilt University, he spent eight years in the US Navy as a Seahawk helicopter pilot before earning his MBA at the London Business School. Abe left military service in 2008, right during the Great Recession. With school loans, a new baby and another on the way, Abe and his wife, also a Navy veteran, had to become very entrepreneurial to survive.
Abe leveraged his military experience, working in uncertain and difficult environments, to build a career in emerging markets. He lived and worked in Bulgaria, Egypt, Ghana, and Qatar for years. In 2013, Abe and his family returned to the US, and he worked as Director of Innovation for a charity to launch a direct trade Ugandan coffee with social impact.
This experience introduced him to the food industry, and in 2015, Abe decided to combine his passion for healthy cooking with his entrepreneurial spirit to create True Made Foods. He now lives with his wife and four kids in Alexandria, VA, where what little spare time he has is spent shuttling kids between multiple sports practices and events.
Industry Headlines
Ferrero Strikes Roughly $3 Billion Deal for Maker of Froot Loops, Frosted Flakes
Ferrero, the maker of Nutella, will acquire WK Kellogg for roughly $3 billion to grow its business in North America.
WK Kellogg shareholders will receive $23 per share in cash, a 40% premium. The deal gives WK Kellogg a $3.1 billion enterprise value.
Ferrero is targeting the U.S. for acquisitions. WK Kellogg was formed after Kellogg spun off its North American cereal business.
P&G Plans Price Hikes as Shoppers Grow ‘More Careful’
Consumer packaged goods giant Procter & Gamble (P&G) is raising prices amid growing consumer caution.
The company released earnings Tuesday (July 29) showing a 2% increase in net sales, while also introducing guidance for its next fiscal year included a $1 billion hit based on projections of higher costs from tariffs.
Management said it was projecting a slight downturn in consumption among both higher-income and lower-income consumers in response to economic conditions.
L'Oréal Signs Agreement to Acquire Color Wow
L’Oréal today announced that it had signed an agreement to acquire Color Wow, one of the world's fastest-growing and most innovative professional haircare brands.
Color Wow is a renowned prestige brand in the US haircare market and is experiencing rapid growth, thanks in part to advocacy and its highly engaged online community. Still true to its professional origins, the brand is now omnichannel and is already distributed in salons, selective distribution, and e-commerce platforms.
This acquisition further strengthens L’Oréal’s Professional products portfolio, with a proven track record of success and strong potential for global growth.
Harmonya Secures Investment from W23 Global to Advance AI-Driven Product Data Attribution and Insights for Retail and CPG
Harmonya, the AI-powered insights platform helping CPGs and retailers enrich product data and uncover growth opportunities, announced today the addition of W23 Global to its group of investors. This follows the recent investment from dunnhumby Ventures, supported by Bright Pixel and Team8.
Building on this momentum, W23 Global — a global grocery retail venture capital fund backed by five leading grocery retailers including Ahold Delhaize, Tesco, Woolworths Group, Empire Company Limited Ltd/Sobeys Inc., and Shoprite Group — is supporting Harmonya's mission to help enterprises better understand and act on real-time product data.
W23 Global's investment underscores the important need for retailers and CPGs to modernize how they manage product data and access deeper shopper insights at scale.
Starbucks Tests Coconut Drinks, Agave Syrup in Healthier Menu for RFK Jr. Era
Starbucks Corp., which built a loyal following in part by selling sugary candy-colored drinks, has a vision for a healthier menu that’s better suited for the MAHA era.
It’s testing matcha and cold brew made with coconut water. It’s exploring syrups sweetened with agave instead of sugar.
The moves are meant to draw in the health and wellness crowd, part of a broader menu overhaul designed to bring more traffic to stores and reverse a stubborn sales slump.
EU Said to Push for a Spirits-Wine Tariff Deal Touted by Arnault
The European Union is pushing to get more exemptions from the 15% tariff agreed with the US this week, with wines and spirits a top priority.
The bloc, backed by industry leaders such as LVMH’s Bernard Arnault, is seeking a deal that would take the spirits and wine sectors at least back to the way they operated before US President Donald Trump’s Liberation Day tariff announcements, people familiar with the matter said.
It would mean a zero-tariff scenario for spirits and a most-favored-nation rate for wine of about 6% to 7%, the people said, marking a crucial change for a European sector that exported about €26 billion ($30 billion) worth of such alcoholic drinks to the US last year. The discussions also foresee zero EU tariffs on US spirits.
How AI-Enabled Visual Intelligence Is Transforming Experiences at the Shelf
Many CPG brands are embracing mobile artificial intelligence technology that allows them to collect critical SKU-level data on every shelf, cooler and display, including competitive insights. From just a photo captured in-store, brands can instantly see how their products stack up against the competition in terms of share, assortment and pricing.
Many CPG suppliers are leveraging in-house field teams to capture image recognition data. The time it takes teams to capture image recognition data is minimal; they simply take a picture while at the store. This approach gives the supplier full control of the data that is captured.
Regardless of the approach, standardizing the data collection process and creating a single source of truth is critical, and brands that can integrate those data sources — consumer data, sales and depletion data, retail execution data — will have the most accurate understanding of their overall performance.
About NP Capital Advisors
NP Capital Advisors is a next-generation investment bank and consulting firm founded by a team of experienced entrepreneurs, bankers, and attorneys who have built, operated, and sold successful businesses. The firm offers tailored solutions across M&A, restructuring and turnarounds, and strategy and growth consulting in a variety of sectors. With a performance-driven fee structure and a track record of delivering exceptional results, NP Capital Advisors is dedicated to helping founder-led and emerging growth businesses maximize value and overcome challenges.
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