Every entrepreneur dreams of growth, but as Nathan Shafer learned in the trenches of his family’s HVAC business, growth without a plan is just "chaos with higher stakes." After inheriting a company generating only 1–3% profit, Nathan managed to scale it into an eight-figure operation.
But scaling his business didn’t happen without challenges—including managing cash flow. The business’s revenue was strong, but cash was light. This is something we call the “growth paradox;” growth alone doesn’t create stability, and profit alone doesn’t build confidence.
Data from our 2025 Cash Flow Compass report reveals a startling gap: 94% of business owners expect to grow, yet 88% still face cash flow challenges. Even more telling, 76% of those owners say cash flow issues are the primary roadblock to that very growth.
Profit does not equal cash. You can be profitable on paper but still find yourself staring at a dry bank account when payroll is due. Here are five financial moves, drawn from Nathan's journey, to help you stop reacting to your bank balance and start leading your business.
1. Turn past results into future strategy
When scaling his HVAC business, Nathan learned a hard lesson: leading indicators tell the story of your future, while your P&L often just summarizes the past. To build a 2026 strategy, he suggests looking past top-line revenue and focusing on the "heartbeat" of the business—your cash reserves.
Nathan shared a pivotal moment for his business during the COVID-19 pandemic that proved why cash is the ultimate growth tool. While the industry faced massive supply chain disruptions and equipment prices skyrocketed, Nathan didn’t panic. He started buying.
Because he had built disciplined cash reserves, he was able to turn a storage barn into a mini-warehouse, stockpiling high-demand units, refrigerant, and ductwork. This cash-first strategy became a massive competitive advantage; while competitors were forced to tell customers that installations were weeks or even months away, Nathan’s team could finish jobs the same day. By having the liquid capital to buy in bulk, he not only strengthened his position with suppliers when materials were at their scarcest but also captured market share that his competitors simply couldn't.
"If I wouldn't have had the cash set aside, we wouldn't have been able to do that," Nathan said. "It was the difference between keeping our guys busy and clients happy versus sitting stuck in the moment using current conditions as an excuse."
Think of 2026 planning as the right time to do a cash flow health check. Ask yourself about:
Gross Profit Dollars vs. Margins: Margins are great for ego, but dollars pay the bills. Are you generating enough actual cash to survive a 2026 "surprise"?
Labor Creep: This is a silent killer. If your labor percentage is creeping up by even 1–2%, it could be an early warning sign of a cash flow problem—one that could lead to layoffs.
Revenue per Employee: If your headcount is growing faster than your profit, you are likely hiring to manage systemic chaos—like scheduling errors or "re-work"—rather than driving actual business value.
2. Forecast for flexibility
Building the kind of cash reserves that allow you to scale while others stall doesn't happen by accident. It requires moving beyond “hope-based” budgeting and into what Nathan calls “Flexible Forecasting.”
The "bottom-up" approach
Many business owners look at what they think they can sell and hope there is profit left over at the end of the month. Nathan suggests the opposite. Instead of starting with a revenue goal, start with your desired net profit.
Start with the End: How much cash do you actually want to take home or keep in the business in 2026?
Add your Fixed Costs: What does it cost just to keep the lights on (rent, software, core staff)?
Calculate the Revenue Needed: Based on your known margins, how much do you have to sell to cover those costs and hit that profit goal?
This "Flexible Forecasting" approach allows you to see exactly how many jobs or units you need to sell to hit your goal, rather than just "working hard" and hoping the math works out at the end of the month.
3. Budget by design, not by default
Many business owners fall into the trap of simply rolling over last year’s budget and adding a small percentage for growth. Nathan argues that if you are constantly hitting your budget with ease, you aren’t pushing your team to their full potential. On the other hand, if you missed your goals in 2025, simply repeating the same numbers and "hoping" for a better 2026 is a recipe for stagnation.
To scale past the seven-figure mark, Nathan shifted from a single company-wide budget to departmentalized financials. By breaking the budget down by department (e.g., service vs. sales), he was able to identify exactly where the business was "bleeding" and where it was most profitable.
He also advocates for a "transparency-first" culture. Rather than the owner setting the goals in a vacuum, Nathan’s leadership team builds the departmental budgets themselves.
"It can't just be up here in my head, or the owner's head. It has to be their ideas, their plan. Now they've got full belief to go out and execute,” Nathan said.
A disciplined budget isn't just a spreadsheet; it's an execution plan. It tells you:
Where to Invest: Knowing which departments have the highest return on investment allows you to allocate marketing and labor dollars where they will grow the most.
What to Stop Doing: If a department is consistently underperforming despite the right team and resources, the budget gives you the "permission" to pivot or cut back.
Not to "Move the Goalposts": Nathan is firm that even if you are falling short mid-year, you don't lower the goal. You readjust the plan—not the target.
4. Simplify your financial systems
For years, Nathan’s HVAC business was 100% paper-based. He described those early days as a constant battle against "noise"—the manual data entry, the lost invoices, and the "financial fog" that sets in when your bank account doesn't talk to your accounting software. To scale to eight figures, Nathan had to stop being the "human bridge" between his systems and start building a tech stack that worked for him.
Investing in technology isn’t about gimmicks or hype. It’s a way to buy back your time and ensure you are making decisions based on real-time data, not last month's guesses.
Nathan’s digital transformation centered on three key pillars:
Integrated Banking: By using Relay1, Nathan’s banking and bookkeeping finally became a single source of truth. Instead of waiting weeks for a bookkeeper to manually reconcile accounts, he can see his real-time cash position instantly.
Profit First Automation: Nathan uses multiple accounts within Relay to automate his savings. By carving out profit and tax money, the second revenue hits the bank, he knows the business can run on what’s left, rather than hoping there’s a surplus at the end of the month.
Operational Connectivity: Integrating his field service management software with his financial tools meant that as soon as a technician finished a job, the data flowed through the system without anyone having to touch a piece of paper.
1Relay is a financial technology company and is not an FDIC-insured bank. Banking services provided by Thread Bank, Member FDIC. FDIC deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply.
5. Build financial agility
The final move is one that is never too early or late to get a start on—building habits that keep your business on track. Nathan emphasized that once your systems are clean, you need a "financial cadence" to ensure you are never blindsided by a bad month.
Nathan’s team follows a strict review rhythm to maintain clarity:
Daily Cash Reviews: Nathan reviews his cash position and net profit every single day.
Weekly Scorecard Huddles: Each department has a scorecard they review daily, which then feeds into a weekly leadership meeting (L10).
Monthly "Hard" Closes: Ideally, Nathan wants the books closed by the 5th of the following month to ensure the data is fresh enough to act on.
Financial agility is about catching "leaks" before they become floods. Nathan shared three critical red flags to keep an eye on:
Stagnant Cash Buckets: If your dedicated profit or tax accounts aren't growing as planned, something is broken in your operations.
Margin Compression: A 1–2% drop in gross profit or an increase in labor costs ("labor creep") are silent killers that often show up in the cash flow before they appear on a P&L.
The "Manual" Gut Check: Nathan recommends doing random "manual job costing" rather than just trusting the CRM to make sure your pricing still matches the rising cost of goods.
"If you see it, address it, fix it. Act faster. Ask sooner. Don't wait,” Nathan said.
Build your 2026 game plan
Ready to build your 2026 game plan but not sure where to start? Try these three “day one” moves to get your 2026 off on the right foot:
Run Your "Bottom-Up" Math: Don't wait for your accountant. Decide today what your target net profit is for 2026, add your fixed costs, and find your "must-hit" revenue number.
Audit Your "Noise": Look at your payroll vs. your revenue from last month. If you’re hiring more but making less per person, it’s time to stop the manual data entry and integrate your banking with your field software.
Set Your Rhythm: Set a scheduled time to look at your cash. Even five minutes of looking at your Relay dashboard can build the financial intuition you need to spot leaks before they become floods.
2026 is your year to stop chasing and start building the leadership and financial agility that will carry your business for the next decade.
Quick answers
Q: How much cash reserve do I need?
A: Enough to be proactive, not just to survive. Focus on having enough gross profit dollars to seize opportunities during a market shift, such as bulk buying.
Q: What is the first sign of "noise" vs. growth?
A: A drop in revenue per employee. If you’re hiring more people but your profit is stagnant, your systems are likely broken.
Q: Why shouldn’t I just base my 2026 budget on my 2025 actuals?
A: Because 2025 actuals tell you what happened, not what you want to happen. Using bottom-up forecasting, start with the profit you want to take home, add your fixed costs, and then determine the revenue required to get there.
Q: How does Relay help?
A: Relay automates your "profit-first" strategy with up to 20 individual accounts1 and provides real-time data integrations so you can see your true cash position every day.
1Relay is a financial technology company and is not an FDIC-insured bank. Banking services provided by Thread Bank, Member FDIC. FDIC deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply.
