A wash can finish a year with positive cash generation and still need cash during a closure, weak collection month or equipment project. Monthly runway asks when money is available and when it leaves. Start with the acquisition’s available operating cash, then test twelve dated operating periods rather than dividing an annual profit figure by twelve.
Start after the acquisition cash has been allocated
Opening available cash is the money actually available to the modeled operation. Do not count the purchase equity, a landlord’s held deposit or a restricted equipment reserve again simply because those amounts appeared in a sources-and-uses schedule. If the price already includes a working-capital amount, establish what transfers, what must be replenished and what remains available at the starting date.
The SBA planning material distinguishes one-time and recurring costs and discusses financial projections. It does not establish a standard cash reserve for every car wash. Here, the reserve requirement comes from the entered receipts, payments, timing and chosen cash floor. Keep that original planning method separate from loan eligibility or a lender’s own liquidity conditions.
Build the monthly inputs from cash evidence
| Input | Evidence and treatment |
|---|---|
| Collected operating receipts | Bank and processor settlement records, cash deposits and a dated collection forecast; distinguish loans and owner contributions. |
| Volume-linked cash costs | Only costs you explicitly assume change with receipts in the downside case; identify supplier-payment lags. |
| Fixed or timing-specific costs | Payroll coverage, occupancy, insurance and bills that remain payable in that month even if receipts fall. |
| Debt and taxes | Actual payment schedules and adviser-prepared cash tax estimates, not automatic percentages of revenue. |
| Project payments and owner draws | Include the actual cash timing; avoid repeating a project invoice already placed in operating outflows. |
| Committed financing | Only an identified, available inflow with documented timing and conditions; a possible loan is not committed cash. |
A month’s sales are not necessarily that month’s receipts. Card settlements can arrive later, membership cash can relate to future service, refunds can cross periods, and tax collections can create later remittances. Choose a consistent gross or net treatment and reconcile it. If you enter receipts net of processor fees, do not deduct those fees again. If receipts include collected sales tax, include the corresponding remittance when due.
The cash bridge and funding calculation
Closing cash = opening cash + operating receipts + committed financing
− volume-linked costs − fixed/timing-specific costs
− debt − taxes − projects − owner draws
Next month opening cash = prior month closing cash
Extra opening funding = max(0, chosen floor − lowest cash point)
The lowest cash point includes opening cash as well as all modeled month-end balances. Therefore, a starting balance below the floor creates an immediate funding requirement even if the first month improves. Extra funding is a hypothetical additional amount available at the opening date; it is not silently added to the table, and it does not duplicate committed financing already entered.
A fictional year with a shutdown
The example starts with $50,000 available cash and a $25,000 floor. Receipts across twelve months total $770,000, volume-linked cash costs total $154,000, and fixed costs, debt, tax, projects and draws total $547,000. Net cash generation is $69,000, so the year ends at $119,000 before any unplanned funding.
That positive annual result hides a month-three closure: receipts and variable costs are zero, fixed payments continue, and a $25,000 project is paid. Cash reaches −$33,000 in month three. Maintaining the chosen floor would require $58,000 of additional opening funding, assuming every other entry remains unchanged. A year-end balance alone would miss this need.
The fictional downside cuts receipts and the specifically classified volume-linked costs by 20%. It keeps fixed costs, debt, tax payments, projects, draws and committed funding unchanged. The low point becomes −$53,000 in month four, implying $78,000 of extra opening funding to preserve the same floor. These are invented inputs and arithmetic outcomes, not expected car wash performance.
Stress collection and payment timing deliberately
The built-in percentage case is intentionally limited. It does not model a collection delay, a supplier whose bill comes due despite reduced sales, a tax adjustment, or an unapproved line of credit. For a delayed collection case, move the receipt into the later month while keeping the affected payments in their actual periods. Export the original case before changing it so the versions remain distinguishable.
Classify a payment as volume-linked only if the assumed cash reduction is appropriate to that same month. A chemical purchase already ordered, minimum staffing, a prepaid contract or a lagged utility bill may belong in timing-specific costs instead. The model does not infer expense behavior from a generic industry margin.
Month-end solvency is not daily solvency
A positive month-end balance can follow a missed payroll or invoice earlier in the month. Where timing is tight, replace the monthly view with a dated weekly or daily cash schedule. Confirm restricted cash, deposit holds, facility availability, payment cutoffs and the conditions on financing. A chosen floor is a management assumption, not a universal safety certification.
Use the annual acquisition calculator for the whole investment and scheduled loan arithmetic. Use this planner for timing. The lease cost comparison can inform occupancy payments, and the equipment reserve planner can inform a project case. Reconcile their amounts before combining them; moving money into a dedicated reserve is not the same as paying an equipment supplier.
Download the monthly cash evidence worksheet
Questions before using the result
Does the funding result mean I can obtain that loan?
No. It is the additional opening cash needed under the entered schedule and floor. Availability, pricing, collateral and approval of any funding remain separate questions.
Can I begin with an overdrawn balance?
Yes. A negative opening cash value remains visible. The required opening funding includes the gap from that starting point to the chosen floor.
Why does the downside reduce some costs?
It changes only the costs you classify as volume-linked, at the same percentage as receipts. Enter obligations that do not respond that way in fixed or timing-specific costs instead.
Does this calculate taxable profit?
No. It tracks entered cash receipts and payments. Principal, capital projects and owner draws can affect cash without being the same as ordinary accounting expenses. Ask the accountant to reconcile the cash plan to profit and tax treatment.
Reconcile opening cash with the acquisition funding bridge
Reconcile opening cash with the acquisition funding bridge with the method, private tool and reproducible fictional case. Reconcile periods and amounts before carrying a result into another model.
Connect operating evidence and the next decision
Retail package pricing and mix. Keep periods and definitions consistent when manually carrying results between tools.
Sources and scope
Official and original sources checked October 17, 2026. These sources support the identified rules and methods; they do not verify a particular business or property.
- US Small Business Administration — Planning costs and financial projectionsPlanning one-time and recurring costs and financial projections; not an acquisition reserve benchmark or loan approval.
- US Small Business Administration — 7(a) loansProgram purpose, maximum, eligibility overview and lender application; not a loan offer.
Continue your review
Verify the revenue · Normalize earnings · Model the cash flow