Cash Flow for Small Business: How to Build a Monthly Table and See When Money Runs Out

Many small businesses do not stop because they make losses. They stop because the money ran out in a month when they were profitable on paper. The owner watches sales grow, then finds they cannot pay the staff because their biggest customer has not settled yet, or because they bought a large batch of materials ahead of the busy season. That is what cash flow for a small business measures: not whether you make a profit, but whether you will have the money on the day you need it.

This article explains what cash flow means and why it differs from profit, then builds a monthly cash flow table step by step and applies it to an illustrative 12-month example: a dessert kitchen that sells for cash to individuals and on credit to cafés. We then test the example under three scenarios, look at the most common cash traps in Egypt, and cover how to read and manage your table every month after you open.

What is cash flow?

Cash flow is the inflow and outflow of cash within a business over a specific period. That is the short definition used by the US Federal Deposit Insurance Corporation and the US Small Business Administration in their training programme for small business owners². The key words are "a specific period": a week, a month or a year. What matters is not only how much comes in and goes out over the year, but when each amount arrives and when each one leaves.

An everyday example: an employee earns EGP 15,000 a month, paid on the 25th, and the rent on their flat is EGP 6,000, due on the 1st. Their annual income covers the rent easily, but if they start a new job on the 1st, they pay their first rent more than three weeks before their first salary arrives. That timing gap is the heart of cash flow, and a business faces it every month, with bigger sums.

Three sources of cash movement

Accounting textbooks split the cash movements of any business into three activities³:

• Operating activities: cash from the activities the business uses to earn its profit, such as collecting sales and paying for materials, wages and rent.
• Investing activities: cash related to investments in long-term assets, such as buying machines and ovens and fitting out the premises, or selling an old piece of equipment.
• Financing activities: cash related to raising money through debt or ownership, or repaying that debt, such as the capital the owner or a partner puts in, or a bank loan and its instalments.

This split is useful for a small business owner even without an accounting background, because it answers one important question: does the activity itself generate cash, or is the business living on capital and loans? A business whose operating cash flow stays negative for many months after the start-up phase needs to look again at its price, its costs or its sales volume, however comfortable its bank balance looks today.

Why profit and cash are different

The income statement records revenue when the sale happens and records an expense when it belongs to the period, whenever the money is actually paid or collected. This is accrual accounting, and it creates timing differences between the income statement and cash⁴. Five things make the two figures differ in most small businesses:

1. Credit sales: if you deliver EGP 20,000 of goods to a café in March and it pays in April, the revenue is in March's profit but the money reaches the till in April.
2. Stock and advance purchases: materials you buy today and sell next month leave the till now, but appear as a cost in the income statement only when they are sold.
3. Depreciation: spreading the price of equipment over its useful life in the income statement. It reduces profit every month, but no cash is paid, because the money left in full on the day the equipment was bought. Depreciation is the most common example of a non-cash expense⁴.
4. Asset purchases and loan repayments: buying an oven for EGP 120,000 in cash takes the money out in one go, but the month's profit shows only its depreciation. The principal you repay on a loan does not appear in the income statement at all, only the interest.
5. Taxes collected for the state: if you are registered for VAT, the tax you add to the customer's invoice comes into your till but is not your revenue, and it will go out again when you pay the return.

The practical result: a profitable business can run out of money, and a loss-making one can look comfortable for a few months because it collects deposits from customers or delays paying its suppliers. That is why you need both figures: the income statement tells you whether the model makes money, and the cash flow tells you whether you will survive until that profit shows up.

How to build a monthly cash flow for a small business

You do not need accounting software to start. A simple table on paper or in a spreadsheet is enough, as long as you keep to one rule: every amount goes in the month the money actually moves, not the month the transaction took place. These are the six steps:

Step 1: set the period and the opening balance

For a new business, start in the month you pay the first pound, and cover at least 12 months after opening. The opening balance is the money actually available on that date. At the planning stage it is better to build the table without the capital first, so it shows you how much money the business needs, and then decide how to fund it.

Step 2: enter receipts by collection date

Split your expected sales by how customers pay: cash or instant electronic payment, credit at 30 days, and longer credit. Cash sales come in the same month; credit sales come in the month they fall due. Add any other receipts: a customer's deposit, the sale of old equipment, capital from a partner, or a loan.

Step 3: enter payments that move with sales

Materials, packaging, commissions and delivery costs move with sales volume. Work them out as a percentage of sales or a cost per unit, but record them in the month you pay the supplier. If the supplier wants payment on delivery, they leave before you sell the product. If you get 30 days' credit, they leave the following month.

Step 4: enter fixed and mandatory payments

Rent, wages, the employer's social insurance share, utilities, ongoing marketing, the accountant's fees and software subscriptions. These are paid whether you sell or not, which is why they drain cash in the first months. In Egypt some of them are mandatory figures, not estimates:

• The National Wages Council raised the private-sector minimum wage to EGP 7,000 a month from 1 March 2025, and press reports in June 2026 said no new decision had been issued for the private sector by then⁵. Check that no newer decision has been issued before you rely on the figure.
• Under Law No. 148 of 2019 the employer pays 18.75% of the insurable wage and the employee 11%, with a minimum insurable wage of EGP 2,700 and a maximum of EGP 16,700 a month from 1 January 2026⁶. The employer's share is cash that leaves every month on top of the wage.

Step 5: add irregular payments

These are the items that surprise owners because they do not recur every month: a licence renewal or annual subscription, periodic equipment maintenance, a rent deposit when the lease is renewed, bulk buying before a season such as Ramadan, the Eids or the start of the school year, annual raises and bonuses, and taxes, including income tax: your accountant or Maher Consulting Firm can tell you which regime applies to your activity and when it is paid. Put each item in its expected month and do not divide it by twelve, because the till does not pay it in instalments.

Step 6: work out each month's net flow and the running balance

Net monthly flow = receipts − payments. Running balance = last month's balance + this month's net flow. Read the running balance column for three things: the first month with a positive net flow, the deepest point the balance reaches, and the month it happens. The deepest point is the minimum amount you must have available from the start; anything less means the money runs out before the business starts covering itself. Because the table is monthly, it does not show what happens within the month: wages and rent may go out before collections come in, so the real low point can be a little deeper, which is one more reason to hold a reserve.

Remember that these projections are estimates that can be revised at any time². The table is not a document you write once; it is a tool you update every month with actual figures.

Illustrative worked example: 12 months for a small dessert kitchen

Let us apply the steps to one example: a small dessert kitchen in Cairo that sells to individuals from its shop and through orders it delivers itself, and also supplies a number of cafés. This is an illustrative example: the prices and quantities are assumptions to show the method, not documented market prices, and the assumed wage (EGP 8,000) is set above the official minimum, with social insurance at the official rate. All results are calculated with code.

Assumptions

• Startup costs (month 0): equipment and ovens EGP 220,000, fit-out 80,000, a two-month rent deposit 20,000, first stock of ingredients and packaging 25,000, formation and licences 15,000, launch marketing 10,000. Total EGP 370,000.
• Monthly sales: EGP 50,000 in month 1, then 70,000, 90,000, 105,000, 120,000 and 130,000, levelling off at EGP 140,000 from month 7.
• Collection: 60% of sales to individuals in cash or by instant electronic payment; 40% to cafés, collected after 30 days, that is, the following month.
• Ingredients and packaging: 40% of sales, paid to the supplier in the same month because the business is new and gets no credit. From month 7 suppliers raise their prices and the ratio becomes 43% (an assumption to show the effect of inflation).
• Fixed monthly payments of EGP 55,000: rent 10,000; wages for 3 workers 24,000 (8,000 each); employer's social insurance share 4,500 (18.75% of 24,000); utilities 6,000; ongoing marketing 5,000; transport and delivery 3,000; accountant and other expenses 2,500.
• Irregular item: annual equipment maintenance of EGP 15,000 in month 7.
• Depreciation: equipment and fit-out (EGP 300,000) depreciated over 5 years, EGP 5,000 a month. It is used only to calculate profit.
• Pre-opening expenses: formation, licences and launch marketing (EGP 25,000) are charged to profit in month 0. The rent deposit and the first stock are not expenses: the deposit is refundable and the stock is replaced by each month's purchases.
• The owner draws no salary in this example. If you will take a monthly amount to live on, add it to fixed payments, and the funding needed will rise.
• To keep the example simple, all figures exclude VAT and are before income tax, and there are no loans. Although the business in this example reaches the VAT registration threshold in month 6, as we will see, your real table must add the tax and the timing of its return to the months after registration.

Cash flow table for the first 12 months

The running balance in the table is calculated before the owner puts in any capital, so the business's need shows clearly. The last column is the month's accounting net profit, for comparison only. Figures in EGP.

How is one row worked out? Take month 2: sales are EGP 70,000. 60% comes in as cash, EGP 42,000, together with what the kitchen supplied to cafés in month 1, which is 40% of 50,000, or EGP 20,000. Cash in is EGP 62,000. Ingredients are 40% of 70,000, or EGP 28,000, and fixed payments are EGP 55,000, so cash out is EGP 83,000. The month's net flow is −EGP 21,000, and the running balance is −415,000 − 21,000 = −436,000 EGP.

What the table tells you

First, the deepest point is EGP 445,000, in month 3. This is the minimum the owner must have available, and it is EGP 75,000 more than the startup costs (EGP 370,000): that is what operations consume in the first three months. An owner who raises only the startup costs will be unable to pay wages in month 1. Because sales can come in later than expected, a reserve is usually added on top of the deepest point. With a reserve equal to two months of fixed payments (EGP 110,000), the suggested funding becomes EGP 555,000.

Second, profit and cash do not move together. Net profit for months 1 to 12 totals EGP 82,800, while net cash flow from operations in the same months is EGP 86,800. The EGP 4,000 gap is explained by two items: depreciation (EGP 60,000) reduced profit without leaving the till, so it is added back, and the cafés' balance for month 12 (EGP 56,000) is in profit but has not reached the till yet, so it is deducted. That is 82,800 + 60,000 − 56,000 = EGP 86,800. This simple reconciliation is the best test of whether your table is right. Note too that a positive profit does not mean the business has recovered anything: the running balance at the end of the year is still −EGP 283,200.

Third, one irregular month changes the picture. In month 7 the annual maintenance (EGP 15,000) coincided with higher ingredient prices, so net flow fell from EGP 19,000 in month 6 to EGP 5,800, even though sales rose. Had the item not been in the table, it would have been a surprise in a month that looked excellent.

Fourth, rising costs eat the margin quietly. At sales of EGP 140,000, monthly net profit would have been EGP 24,000 with ingredients at 40%; at 43% it is EGP 19,800, which is EGP 4,200 less every month. To bring the ingredient ratio back to 40% you would need to raise selling prices by about 7.5%, assuming the quantities sold stay the same. That is not only an accounting decision; it depends on what your customers will accept and what your competitors do.

Fifth, watch the VAT registration threshold. Under the VAT law, the general rate is 14%, and registration is required for anyone whose sales of taxable and exempt goods and services reach or exceed EGP 500,000. For businesses reaching that level after the law took effect, it is measured in any fiscal year or part of one, the registration application is due within 30 days of reaching it, and the Minister may amend the threshold, so check the current figure⁷. In this example cumulative sales pass EGP 500,000 in month 6 (EGP 565,000), assuming months 1 to 6 fall in the same fiscal year, so the owner should check with an accountant before then how the threshold applies to their business and when registration becomes due. Watch the effect on price too: once registered, the tax is added to the customer's invoice, and if you cannot raise your prices to individuals enough to cover it, it comes out of your margin. Review your pricing before you reach the threshold, not after. Once registered, the VAT return is filed monthly within the month following the end of the tax period⁸, so the tax you collect from customers sits in your till for weeks before you pay it over, and it is not your money. Keep it in a separate account so it does not get spent on operations.

What if? Three scenarios for the same example

The base table rests on assumptions, and the two that move cash most in this kind of business are how quickly the cafés pay and the level of sales. We recalculated the example with the same code twice: once with café payments slipping to 60 days, and once with sales 20% below expectations in every month, leaving everything else unchanged.

The second row is the most important point in this article: profit did not change by a single pound, yet the business needed EGP 34,000 more, its first month of positive flow came a full month later, and net cash flow from operations in months 1 to 12 fell from EGP 86,800 to EGP 30,800, just because customers paid after two months instead of one. If collection stays at 60 days, the cafés' balance at the end of the year is EGP 112,000 instead of 56,000: the business's money held by customers has doubled.

The third row shows that sales 20% lower turn the profit of the first 12 months into a loss of EGP 80,760 and push the cash need close to the second scenario, but for a completely different reason: the business spends longer below break-even, and even once sales settle at EGP 112,000 monthly net profit is only EGP 3,840. Note that the deepest point comes in month 7, after the first positive month (month 6), so a first positive month does not mean the business is out of danger, because the annual maintenance and higher ingredient prices pushed net flow back to −EGP 9,360. Monthly cash break-even revenue in this example, that is, excluding depreciation, is about EGP 91,667 with ingredients at 40% (55,000 ÷ 60%), rising to about EGP 96,491 at 43%. Adding depreciation (EGP 5,000 a month) gives an accounting break-even of EGP 100,000, then about EGP 105,263. We explain how to calculate break-even and the margin of safety in detail in our article on break-even and working capital.

Common cash traps in the Egyptian market

Selling to businesses on credit

Supplying cafés, restaurants and companies opens up volumes you cannot reach selling to individuals, but it usually comes with payment terms, and sometimes with delays beyond them. Before you take on a large customer, work out in your table how much of your money it will tie up and for how many months, as we did in the second scenario. Agree the payment period in writing, check the age of what you are owed every week, and consider a small discount for immediate payment if it costs less than financing that amount.

Inflation and rising supplier prices

Annual urban headline inflation was 13.9% in September 2026, down from 14.5% in August, and prices rose 1.3% month on month in September alone, according to CAPMAS data¹. That hits your cash in two ways: every new batch of materials needs more money for the same quantity, and the selling prices you set at the start of the year may not cover the cost by the end of it. Do not build a table with fixed prices for twelve months. Set dates to review supplier and selling prices, and put the expected increases in the months you expect them.

Deposits and advances that get locked up

The rent deposit, the deposit with the electricity or gas company, and the advance you pay a supplier when ordering equipment or large quantities are all cash that leaves the till without appearing as an expense in the income statement. In the other direction, a deposit you collect from a customer before delivery reaches the till before it becomes revenue, so do not treat it as free money until you have delivered what it pays for. Record these amounts in the month they move.

The cost of borrowing to close the gap

When a month shows a shortfall, the quick fix is often an overdraft or a short-term loan. That is possible, but not free. At its September 2026 meeting the Central Bank of Egypt kept the overnight deposit rate at 19% and the overnight lending rate at 20%⁹. These are reference rates for the cost of money in Egypt, and each bank sets its own business lending terms. Ask the bank for the full cost in writing, and put the interest and instalments into your table before you decide. If you are planning bank finance, read our article on feasibility studies for bank loans in Egypt, because the cash flow table is what shows whether you can meet the instalments on time.

How to manage cash flow after opening

The table you build at the study stage becomes a management tool once you open. Five habits protect you from most surprises:

1. Compare actual with expected every month: put the actual figure next to each forecast and find the reason for any large gap. Did collection slip? Did ingredient costs rise? Were sales lower than expected?
2. Update the coming months: after each month, re-estimate at least the next three months based on what you learned, so you see a shortfall well before it happens.
3. Watch your collection days: days sales outstanding measures the time it takes to collect cash from customers after a sale is made on credit². If it starts to lengthen, that is an early warning before it shows in your balance.
4. Build a cash reserve: one of the best ways to protect the business from cash flow problems is to keep a reserve, and the suggested approach is to set aside a percentage of profits each month for it².
5. Know how many days your balance covers: divide your current balance by your average daily payments. For comparison, a JPMorgan Chase Institute study of 597,000 small businesses in the United States, using data from February to October 2015, found that the median small business holds enough cash to cover only 27 days of outflows¹⁰. These are US figures, not Egyptian ones, but they show how thin the cushion is even in large economies.

A quick example of the fifth habit: in our example, steady monthly payments are EGP 115,200, or about EGP 3,840 a day on a 30-day basis. For the balance to cover 27 days of payments, it would need to be about EGP 103,680. The 27 days are a US median for comparison, not a recommended target.

9 common mistakes in a cash flow table

1. Recording credit sales in the month of sale rather than the month of collection, so the balance looks better than it is.
2. Treating net profit as cash, and leaving depreciation, receivables and stock out of the picture.
3. Dividing annual items by 12, when they are paid in a single month and create a sudden shortfall.
4. Assuming suppliers will give credit from day one, when a new business usually pays on delivery or in advance.
5. Forgetting the employer's social insurance share, or budgeting wages below the private-sector minimum.
6. Building the table on fixed prices for a whole year in a market where prices change every month.
7. Spending the VAT you collected on operations, then hunting for money to pay the return.
8. Forgetting what the owner draws to live on, so the business looks self-sufficient while its owner takes money out every month.
9. Building only one scenario, without testing what happens if collection slips or sales fall short.

Where cash flow appears in a feasibility study

The cash flow table is the financial core of a feasibility study, because its most important figures come from it:

• Capital required: worked out from the deepest point of the running balance plus a reserve, not from startup costs alone. Startup costs themselves are the first outflow in the table; we cover them item by item in our article on startup costs in Egypt.
• Operating break-even month: the first month in which operations cover their payments and keep doing so, month 4 in our example.
• Payback period: the time until the running balance gets back to zero, meaning the owner has recovered everything they put in. In our example that does not happen in the first year, and the balance at the end of it is −EGP 283,200, which is why a study also needs a summary of years two and three.
• Ability to repay: if there is a loan, the table is what shows whether the monthly flow is enough to pay the instalment.

To see how these figures fit together in a complete study, from estimating demand to costs, break-even and capital, read our guide to feasibility studies in Egypt in 2026.

How Kleverz helps

Kleverz is an AI-powered platform for feasibility studies. If you are still at the idea stage, the free idea check takes about 5 minutes and gives you a verdict (proceed, adjust, validate first or avoid), a Kleverz Score out of 100 across five dimensions, the top 3 risks, and a first step to take in the next 48 hours.

If you are ready for numbers, the detailed study is built on the figures you enter: price, direct cost, expected volume, team, city and capital. It works out startup costs and fixed monthly costs including the employer's social insurance share, a month-by-month cash flow for the first 12 months and a yearly summary over three years, monthly break-even revenue, the operating break-even month, the payback month, the deepest cash need and a recommended capital that adds a two-month reserve, with optimistic, realistic and pessimistic scenarios, the main risks and indicators to track, and a week-by-week plan for the first month. It is delivered within 24 hours of payment confirmation, in Arabic or English. When you decide to go ahead, Maher Consulting Firm, the human consulting arm, handles company formation and procedures.

Frequently asked questions

Sources

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2. Federal Deposit Insurance Corporation (FDIC) and U.S. Small Business Administration (SBA). Money Smart for Small Business, Module 10: Managing Cash Flow (Participant Guide). Checked 17 October 2026.
3. OpenStax. Principles of Accounting, Volume 1: Financial Accounting — 16.2 Differentiate between Operating, Investing, and Financing Activities. Checked 17 October 2026.
4. OpenStax. Principles of Accounting, Volume 1: Financial Accounting — 16.1 Explain the Purpose of the Statement of Cash Flows. Checked 17 October 2026.
5. Ministry of Planning and Economic Development. الاجتماع الأول للمجلس القومي للأجور: رفع الحد الأدنى لأجور القطاع الخاص إلى 7000 جنيه (in Arabic) (2025-02-09); Masrawy. هل ترتفع مرتبات العاملين بالقطاع الخاص تزامنًا مع الحكومة (in Arabic) (2026-06-14) — secondary source. Checked 17 October 2026.
6. NOSI. رفع الحدين الأدنى والأقصى لأجر الاشتراك اعتبارًا من 1 يناير 2026 (in Arabic) (2025-11-30); Andersen Egypt. Social insurance in Egypt (contribution rates under Law 148/2019) (2026-06-30) — secondary source. Checked 17 October 2026.
7. FRA. القانون رقم 67 لسنة 2016 بإصدار قانون الضريبة على القيمة المضافة وفقًا لآخر تعديل (المادتان 3 و16) (in Arabic). Checked 17 October 2026.
8. ETA. إقرار الضريبة على القيمة المضافة يقدم شهريًا على نموذج رقم (10) (in Arabic) (2022-02-25). Checked 17 October 2026.
9. Egypt Today. CBE holds interest rates steady, keeps deposit rate at 19% (2026-09-24) — secondary source. Checked 17 October 2026.
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