How you can improve your cashflow by running paid ads.

Cashflow is often the most stressful metric for business owners. Not having enough cash to make payroll, rent or pay suppliers is what keeps most business owners up at night.

But not having enough cashflow now can prevent the opportunity to generate higher revenue in the future. Imagine being able to get 20x ROI on paid ads but not having enough cash in the bank to run them.

The problem with running paid ads is that you pay now and the revenue might not appear for weeks or months. We have clients who have wedding venues, and those events are being booked in 2027. Pay now, collect revenue in a year. 

And whilst those ads may be wildly profitable (as long as you look at it over a long enough period of time), it's still causing a cashflow crunch today. 

Here's the solution.

Take deposits for event bookings, where the deposit amount is at least 2 times the acquisition cost.

Example

You run ads spending $1k / month

You get 20 leads

Of which 5 convert into booked events

The CAC (customer acquisition cost) is $1000 / 5 = $250

This is the trade you make when you run marketing successfully. You invest $250 now to buy a booking in the future.

If the CAC is $250, then 2 x CAC = $500

If the venues takes a $500 deposit for each event booking, not only would they cover the acquisition (marketing) cost, they would get $250 deposited into cashflow.

This is how you can ensure you never run out of ad budget, and use advertising to improve cashflow, not kill it.