The cash requirement comes from both unsold paid consulting time and the delay between earning a fee and collecting it. This fictional Dallas-Fort Worth advisory boutique pays its principal and two consultants throughout the January 2027–December 2029 forecast. A later small EBITDA surplus does not erase the opening losses or immediately release cash.
Secure funding for the whole delivery-and-collection cycle and test the paid workload. Increasing proposed equity does not make advisory fees profitable.
What does this supply chain business sell?
It sells diagnostics, inventory/demand planning, sourcing advice, logistics design and implementation support. It does not book client freight, merchandise inventory or managed-warehouse revenue. Client operational savings are not automatically consulting fees.
The paid principal and two consultants share the advisory delivery pool. Fractional operations support adds coordination without extra billable capacity. The principal’s paid work is already inside the consulting roster and must not be added as a second owner capacity line.
Why is first-year cash flow worse than EBITDA?
The modeled collection delay is 30 days, with no inventory. First-year earned fees exceed collected fees by $37,344.00. That difference remains in receivables, so it cannot pay current salaries.
The annual table separates fee recognition, cash receipts and operating earnings. EBITDA excludes depreciation, interest and tax. Operating cash flow also reflects collection timing and tax payments. A positive EBITDA row is therefore not a promise that cash increased that year.
| Year | Earned fees | Collections | EBITDA | Operating cash flow |
|---|---|---|---|---|
| 2027 | $410,784.00 | $373,440.00 | -$107,398.32 | -$144,742.32 |
| 2028 | $502,799.64 | $498,243.67 | -$39,295.92 | -$43,851.89 |
| 2029 | $564,141.24 | $559,029.44 | $925.68 | -$4,186.12 |
How much paid capacity is not yet sold?
The base sold utilization is 40%, before the opening ramp and subsequent workload growth. Unfilled time, selling and internal work remain part of the paid team commitment. Outside analysis and data are purchased services, not inventory or an extra unrestricted team.
The owner-principal salary allowance is $12,500.00. Each consultant’s allowance is $8,750.00, before employer allowances. Non-reimbursed client travel is an expense rather than an additional receipt. Those costs must remain when testing a slower pipeline.
What does the revised equity proposal establish?
Proposed equity of $225,000.00 less startup uses of $18,400.00 leaves $206,600.00. Minimum forecast cash is $12,971.13. The saved case explicitly increased its equity proposal after reviewing an earlier cash shortfall.
That proposal is uncommitted and initial project spending remains unrecovered in the forecast. Even in 2029, net income is -$2,540.99 and operating cash flow remains negative. Depreciation and a growing receivable balance explain why a small EBITDA surplus is insufficient. Refundable premises deposits remain excluded.
What evidence makes the advisory cycle financeable?
Follow a paid diagnostic from sponsor approval through authorized data access, analysis, review, invoice and collection. Record selling time and delivery effort by role. Confirm the client’s acceptance process and payment authority before assuming the stated collection delay.
Use actual engagement scopes to test the roster without adding freight or client savings to revenue. Confirm equity commitments and quote startup obligations separately. If client access or payment takes longer, revise cash timing while retaining the paid principal and consultants.
Make the next decision with your own evidence
Collect a paid engagement’s role-level time log, acceptance dates and actual payment date, then confirm funding for the resulting cash cycle.
Explore published business plan examples ↗FlowLedger Advisory is a fictional prelaunch scenario prepared with AI assistance. Inputs are illustrative; forecast results come from the matching saved financial model. Funding is proposed. The diagrams explain the case and do not depict actual premises, established demand or promised earnings. Replace the assumptions with evidence before committing.
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