Episode 323 | The Profit Answer Man I Featuring Natalia Zacharin
3 Cash Flow Leaks Draining Your Profit
If your business is growing but cash still feels tight, the problem may not be revenue. It may be the leaks hiding underneath it. That was the core lesson in Rocky Lalvani’s conversation with Natalia Zacharin, founder of Zacharin Consulting. For small business owners, this matters because cash flow problems usually do not arrive all at once. They build quietly, then show up at the worst possible moment, like payroll, taxes, or debt pressure.
Natalia knows what that pressure looks like. She started her business as a bookkeeping side gig in 2019 and grew it into a 16-person firm that provides accounting, bookkeeping, and fractional CFO services. Her company made the Inc. 5000. But that growth did not make her immune to business stress. In the episode, she shared what happened when one of her largest clients sold their business and she lost $250,000 in revenue right out of the gate. At the same time, she had already invested in sales, marketing, and advertising systems that were not producing the return she expected.
That is why this episode matters so much. It is not a theory lesson about business profit. It is a real discussion about how owners get themselves into trouble, how they can spot it earlier, and what they need to change before a growth plan turns into a cash crisis.
Cash Flow Leak #1: Ignoring Trends Until the Problem Gets Expensive
One of Natalia’s strongest points was simple: your financials are the language of your business. Owners often avoid them because money, taxes, and reports feel confusing or emotionally loaded. But when you avoid the numbers, you do not stop the problem. You just delay seeing it.
She explained that many owners only ask for help when it feels almost too late. They do not understand why they cannot make payroll. They do not understand why a profitable year still left little cash in the bank. They do not understand why tax season suddenly feels painful. The issue is rarely one dramatic event. More often, it is a slow-moving trend that compounded for months.
That is where forecasting changes everything. Natalia described a forecast as a crystal ball. If you project out where the business is headed based on current trends, you can often see issues three, six, or nine months in advance. That lead time gives you options. You can raise prices, cut weak spending, fix a process problem, or delay a hire before the situation becomes urgent.
A lot of owners wait until the bank account forces a decision. That is a dangerous habit. By then, the choices are worse and the stress is higher. [LINK TO: cash flow forecasting for small business] The better move is to look early enough that you still have time to act without panic.
Cash Flow Leak #2: Hiring Because You Feel Busy Instead of Because the Numbers Support It
This was one of the most practical sections of the entire conversation. Natalia said most business owners think about hiring when they are busy, not when the data shows they can support payroll. That is a huge difference. Being overloaded does not automatically mean the business can afford another salary.
In fact, she made the point even more directly: if you are super busy but still cannot afford to hire, there may be a pricing problem. That line hits hard because many owners assume busyness means success. It does not. Sometimes it means the company is underpriced, inefficient, or carrying too many low-value clients.
Rocky pushed on this too. He talked about how owners often “build it and they will come.” They hire ahead of demand, or they take on expenses in anticipation of future income. His view was the opposite: income should come first, then expenses. As he put it, it is better to stress your business with more work than with no cash. That idea is slightly contrarian, but it is powerful. Too many businesses create a cash crunch by staffing for hoped-for demand instead of proven demand.
Natalia also pointed to payroll-to-revenue ratios and data-backed capacity as better hiring signals than stress or overwhelm. [LINK TO: when to hire in a growing business] If the numbers support payroll and the role truly relieves a bottleneck, hiring makes sense. If not, the owner may need to fix pricing, improve efficiency, or stop tolerating low performers before adding headcount.
Cash Flow Leak #3: Spending on Marketing Without a Real Return
One of the clearest pain points in this episode was wasted marketing spend. Natalia shared that she should have demanded a return on investment from one of her agencies much sooner. She waited months while being told that results were coming, more content was needed, and traction would take more time. Meanwhile, the leads did not come.
Her lesson was not that marketing does not work. It was that marketing must be measured. You need metrics. Are leads coming in? Are calls being booked? Are sales happening? If not, the answer is not to keep hoping. The answer is to pivot faster. She said she should have broken that contract three months earlier than she did.
Rocky added an even tougher layer to the discussion. He pointed out how agencies often promise that if you spend a dollar, they will give you three dollars in sales. But revenue alone is not the point. If it costs two dollars to deliver the product or service, and another dollar to acquire the business, then nothing is left. You bought revenue that did not improve profit. That is a gross profit problem disguised as growth.
Natalia also shared a practical benchmark: marketing and advertising should generally stay around 10 to 12 percent of top-line revenue, and only if it is producing a return. That is a useful reminder for owners who treat marketing like a slot machine instead of a measurable investment.
Why Strong Profit Margins Matter More Than Most Owners Think
A detail that stood out in this episode was Natalia’s view on profitability. She said her firm had been extremely profitable, around 50 percent, for many years. When things got hard and she kept investing in growth, profitability dropped to 25 percent, but the business was still profitable. That margin gave her breathing room.
That point matters because many owners normalize thin margins. Then, when the market shifts, a large client leaves, or costs rise, there is no cushion. Natalia argued that businesses need to be more profitable than they think they do, because growth investments, hiring, and market volatility all put pressure on margin. If you have no buffer, every setback becomes an emergency.
She also said she had six months of cash reserves. That reserve turned a scary situation into a manageable one. Without it, the same story could have ended very differently. This is where the profit first mindset matters. Profit is not leftover money if you get lucky. It is the thing that creates resilience, options, and control.
Rocky’s Perspective
What I see over and over is that owners think they have a revenue problem when they actually have a discipline problem. They are hiring too early, spending without measuring, and waiting too long to confront the numbers. Revenue covers up a lot of mistakes for a while, but it does not fix them.
If you are borrowing for payroll or daily operations, that is not a sign you need more hustle. It is a sign something deeper is broken. You do not solve that by throwing debt at it. You solve it by fixing the leak.
Action Step
Pick one number you are avoiding and start there. Review your cash forecast for the next 90 days, look at payroll as a percentage of revenue, and identify one expense that is not producing a clear return. Then make one decision this week. Not next month. This week. That is how you stop a leak before it becomes a crisis.
Conclusion
Cash flow problems rarely begin where most owners notice them. They begin in trends, habits, and decisions that slowly drain profit long before the bank balance forces attention. If you want a healthier business, do not just chase more sales. Find and fix the leaks.
About Natalia Zacharin
Natalia Zacharin is the founder of Zacharin Consulting and an Inc. 5000 entrepreneur. She helps 7 and 8 figure business owners turn financial data into a forward-facing GPS. Natalia will reveal the silent cash leaks draining your profits, exactly when to make your next hire, and how to build a highly sellable asset. Get ready to stop guessing and start scaling with absolute financial clarity!
Links
Website: https://zacharinconsulting.com/
https://www.linkedin.com/in/growyourbottomline/
https://www.facebook.com/zacharinconsulting/
https://www.instagram.com/growyourbottomline/
Profit Blueprint Calculator I Profit Comes First: https://lp.profitcomesfirst.com/profitblueprintcalc-page
Watch the full episode on YouTube: https://www.youtube.com/@profitanswerman
Sign up to be notified when the next cohort of the Profit First Experience Course is available!
Free Copy of the Profit Blueprint Book: https://lp.profitcomesfirst.com/landing-page-page
Monthly Newsletter signup: https://lp.profitcomesfirst.com/newsletter-signup
Relay Bank (affiliate link): https://relayfi.com/?referralcode=profitcomesfirst
Profit Answer Man Facebook group: https://www.facebook.com/groups/profitanswerman/
My podcast about living a richer more meaningful life: http://richersoul.com/
Music provided by Junan from Junan Podcast
Any financial advice is for educational purposes only and you should consult with an expert for your specific needs.