If cash only appears at board meetings once a quarter, it's already too late. As the founder and CEO of Managed Services Group, a security provider specializing in regulated midmarket businesses, I've spent years building a discipline I call “Liquidity as Strategy,” leveraging not only the finance function but also compliance frameworks.
Why I aim for 9-12 months of runway.
I think about cash the same way I think about cybersecurity. It's insurance and leverage. Yes, there is an opportunity cost to holding more cash, but so is being forced to raise capital, reduce pricing discipline, and delay decision-making when conditions get tougher. In today's environment, cash can buy speed, choice, and negotiation power. ROI is not financial engineering. It's survival. Additionally, it is the ability to move while others hesitate.
Resilience is not just a theory, especially in a regulated environment. Liquidity plays the same role as compliance, reducing downside risk while creating freedom of action.
The myth of the “lazy balance sheet”
The biggest misconception I hear from other CEOs is that cash on the balance sheet is idle or unproductive. In reality, undercapitalized companies are vulnerable and often end up making reactive decisions that permanently damage margins and company culture. Another misconception is that access to credit is the same as liquidity, which is actually not the case. Trust has conditions. Cash is control.
I think there is a similar misconception about compliance. CEOs often view compliance as an overhead, but in reality, compliance often increases discipline, predictability, and company value.
Why cash growth is not optimal
When a CEO says that a lot of cash is not optimal, I ask one question. “What decisions would be easier to make if you had more cash?” Most CEOs are quick to cite hiring, M&A, or absorbing short-term shocks. Cash does not replace growth investing; it enables smarter growth investing. We do not hold liquidity to avoid risk. We hold it to help you choose the right risk.
The same logic applies to governance and compliance. The goal is clarity, not attention.
How to decide when to put in cash
We think in stages. First, it protects a minimal runway that ensures resilience under stress. This is non-negotiable. Beyond that, cash becomes strategic capital. We are positive when opportunities strengthen long-term EBITDA durability, improve resilience, or create asymmetric upside factors such as talent, automation, and M&A absorption. If it increases short-term profits at the expense of discipline, then you pass.
Quality EBITDA doesn't just mean growth. The key is predictability and risk-adjusted returns.
90-day liquidity plan for mid-market CEOs
Regardless of industry, I focus on three actions.
• Pricing reality check: Ensure pricing reflects cost, risk, and capital intensity. Most companies underestimate their risks, especially operational and compliance risks.
• Cash Conversion: Shorten billing cycles, eliminate billing complexity, and get serious about AR discipline.
• Expense hygiene: Eliminate silent margin killers, duplicate vendors, underused tools, and manual processes.
You don't need perfection, just momentum.
Building a cross-functional fundraising task force
Cash discipline doesn't just exist in the financial industry. We brought together leaders from sales, operations, IT, and finance with one purpose: to improve the predictability of funds without compromising the quality of service. Finance provided the data, but operations leaders were responsible for execution. This shared ownership was the driving force behind the change.
This reflects what also works in compliance efforts: accountability across functions rather than being locked into one department.
Review rhythm that actually works
Cash needs its own airtime. We review it weekly at the leadership level, monthly for more detailed forecasts, and quarterly with the board. Each rhythm answers a different question. Weekly is recognition, monthly is course correction, and quarterly is strategy. If cash only appears quarterly, it's already too late.
If I had to limit my CEO Cash Dashboard to five metrics, it would look like this:
1. Several months worth of cash on hand
2. 90-day rolling cash forecast
3. AR aging and concentration
4. EBITDA by service or product line
5. Committed vs. discretionary spending
It fits on your phone and instantly tells you whether you're steering or drifting.
Shocks beyond the coronavirus we are currently modeling
We are now modeling cyber incidents, credit tightening, vendor concentration risk, and broader geopolitical fluctuations beyond the pandemic. None of these are things to panic about, but you do need to be prepared. As a result, more confident liquidity targets were set based on actual operational risk rather than fear-based hoarding.
The impact of the coronavirus has exposed optimistic assumptions. We shortened the prediction window, improved data input, and focused on directional accuracy over accuracy. Forecasting doesn't mean being accurate, it means finding problems early and taking action.
How cash discipline became a competitive advantage
The ensuing disruption created an opportunity to hire key talent and invest ahead of demand as competitors slowed. We were able to move quickly because we weren't negotiating the balance sheet at the same time. Liquidity made it possible to do so.
SOC 2 is a third-party audit of our security and controls that forces evidence, frequency, and accountability. That thinking spilled directly into financial governance, documented assumptions, repeatable reviews, and clear ownership. Cash has become a managed control rather than a nebulous measure of comfort.
This lesson still applies to CEOs outside of regulated industries. Discipline does not hinder growth; it protects growth and improves quality.
Incorporating cash discipline beyond finance
Sales leaders recognize margin trade-offs, operational leaders manage cost curves, and IT leaders influence capital intensity. When each group understands how their decisions affect cash, their behavior changes. Cash ceases to be an abstraction and becomes something you can actually spend.
While demand seemed strong in the early days of the coronavirus, the collection told a different story. This disconnect has made it clear that the old model is no longer acceptable. From that week onwards, liquidity was no longer assumed, but began to be designed.
Changing the price of a service is unpleasant both internally and externally. But it is kinder to clarify than to underestimate risk. We have learned that disciplined pricing creates respect, not resistance.
My One Sentence Philosophy? In a volatile world, fluidity does not mean fear. It's about freedom.
