Cash is the lifeblood of every business. Whether you run a small shop, a growing startup, or a young engineering company, one thing is certain – without cash, the business cannot survive. Many entrepreneurs think profits are enough, but the truth is this: a business can be profitable on paper and still fail if cash is not available when it’s needed.
That is why managing cash flow is so important. It is not only about tracking money in and out but also about making sure you have enough money at the right time to keep operations running. In this blog, we will look at:
- What managing cash flow really means.
- The common challenges SMEs and startups face with cash flow.
- Practical tips and relatable examples of how to manage cash flow better.
- Why grants can be a better option than loans for new businesses.
- How our grant management platform can help you find and manage funding.
By the end, you will walk away with practical strategies you can apply immediately and insights on how to secure funding support that strengthens your cash flow without the burden of debt.
What Does Managing Cash Flow Mean?
Cash flow simply refers to how money moves in and out of your business. Money comes in (inflows) when customers pay you, or when you receive funding. Money goes out (outflows) when you pay rent, salaries, suppliers, or buy equipment.
Managing cash flow means making sure the inflows are steady and enough to cover the outflows, both now and in the future.
For instance, imagine a small bakery in Abuja. They just secured a big order worth ₦2 million from a supermarket. The supermarket, however, will only pay in 45 days. But the bakery needs ₦700,000 today to buy flour, sugar, pay workers, and fuel the generator. On paper, they have money coming. In reality, they are stuck. This is what poor cash flow looks like.
Why Managing Cash Flow Is So Important
- Business survival – Without cash, even paying small bills becomes a struggle.
- Growth opportunities – You need cash to grab new contracts or expand operations.
- Peace of mind – Nothing drains a founder more than worrying about how to pay staff.
- Investor confidence – A startup that manages cash flow well is more attractive to investors.
Common Cash Flow Challenges for SMEs and Startups
Many businesses in Nigeria and across Africa face similar struggles when it comes to cash flow:
- Delayed payments – Customers and clients often take weeks or months to pay.
- High fixed costs – Rent, salaries, and utilities don’t wait for income.
- Seasonal revenue – Some businesses only make money during festive seasons or specific periods.
- Relying on loans – Loan repayments and interest eat up cash that should be reinvested.
A practical example would be a fashion entrepreneur in Lagos or Kenya who makes most of her sales in December. By January, demand drops, but bills remain. Because she didn’t plan cash flow properly, she might end up borrowing money at high interest just to keep her shop open.
Practical Tips for Managing Cash Flow
Here are some steps that can make a real difference:
1. Track every naira
Don’t guess. Record every inflow and outflow, no matter how small. This helps you see where your money really goes.
2. Create a simple cash flow forecast
Plan ahead for at least 3–6 months. This helps you prepare for dry months or funding gaps.
3. Negotiate better payment terms
Ask suppliers for more time to pay. At the same time, encourage customers to pay faster, even offering small discounts for early payments.
4. Cut unnecessary costs
Review monthly expenses. Cancel subscriptions you don’t use, or move to a smaller office if rent is draining cash.
5. Diversify income streams
Don’t depend on just one client or one product. Spread your risk.
A practical scenario could be a young engineer running a small design firm. Instead of depending on just one corporate client, he also trains students online. That extra income helps cover rent during months when big projects delay payment.
Grants vs Loans: Which Is Better for Cash Flow?
When businesses face cash flow problems, the first thought is usually loans. Loans can help in emergencies, but they also come with:
- Repayment pressure.
- Interest rates that reduce profits.
- Risk of debt when revenue is not steady.
Grants, on the other hand, are non-repayable funds. This means you can focus on building your idea without worrying about monthly repayments.
Like this young startup founder in Uganda had the chance to develop a mobile app for logistics. He needed ₦4 million. A bank was ready to give him a loan, but repayment would start in just three months, long before the app could generate revenue. Instead, he applied for an innovation grant. That grant gave him the breathing space to build, test, and launch without debt stress.
How Grants Support Managing Cash Flow
Grants help businesses:
- Cover operating expenses when sales are low.
- Bridge the gap between when income is expected and when expenses are due.
- Focus on innovation instead of worrying about repayment.
- Attract more funding later, since investors like to see businesses that manage money well.
How Our Grant Management Platform Helps
Finding and applying for grants can be overwhelming, especially for SMEs, startups, and NGOs. That is why we built Applai: to make the process simple and effective. Here is how it helps your business:
- Discover relevant grants
Our platform shows you grants that are a good fit for your business, increasing your chances of winning funding. You no longer have to spend hours searching through countless opportunities. - Apply with ease and guidance
You can apply for multiple grants in one place, with step-by-step support that reduces mistakes and saves time. More applications mean higher chances of securing funding. - Track and manage your applications
Keep all your grant applications organized in one system. Track progress, deadlines, and updates so nothing falls through the cracks. - Build a stronger funding profile
With your grants documented in one platform, you increase credibility for future funding opportunities. Winning grants early helps your business survive and grow without taking on debt.
At Applai, we believe grants can be a lifeline for businesses at every stage, from the early to the growth stage. Just as you consistently market your business to maintain client revenue, consistently applying for grants can help sustain cash flow and growth.
Get started today and explore grant opportunities for your business: Start now
Point to note:
Cash flow is the heartbeat of your business. Without it, even the best ideas struggle. Managing cash flow means tracking money carefully, planning ahead, cutting waste, and securing the right funding.
While loans can help, they also bring pressure. Grants give you a safer way to manage cash flow, especially in the early stages of your business.
If you are serious about managing cash flow and growing your business with peace of mind, start exploring grants today. Our grant management software is here to guide you every step of the way. See more..
