#293 Why Profitable Businesses Still Run Out of Cash, Scotty Palmer, Fractional CFO and Founder, Palmers Advisors
Understanding why some companies run short of the one resource they simply cannot operate without, cash in the bank, even when they are hitting revenue and profit targets has become an essential leadership skill. Cash flow problems rarely appear in the headline numbers, yet they can quietly derail growth plans, strain supplier relationships, and, in the worst cases, threaten the survival of an otherwise profitable business. For founders, CEOs, and finance leaders, success depends on looking beyond the profit and loss statement to understand the timing, predictability, and movement of cash. Organisations that master cash flow are better equipped to scale with confidence, navigate uncertainty, and seize opportunities while competitors struggle to meet their obligations.
In this episode of The GrowCFO Show, host Kevin Appleby is joined by Scotty Palmer, Fractional CFO and Founder of Palmer’s Strategic Advisors, to explore one of the most common challenges facing growing businesses: why profitable companies still run out of cash. Scotty explains how tight margins, hidden costs, and rapid growth without effective cash flow planning can quickly create a liquidity crisis, even when the profit and loss statement looks healthy. Drawing on his experience advising small and mid-sized businesses in the food and beverage sector, he shares practical examples of how cash constraints can emerge despite strong financial performance.
The conversation also explores the tools and disciplines that help businesses strengthen cash flow and improve decision-making. Scotty discusses the role of financial modelling, KPI tracking, and AI-powered forecasting in creating greater visibility over future cash needs. He explains how a better understanding of unit economics, more accurate cost allocation, and challenging assumptions about seemingly profitable product lines can uncover hidden value and improve financial resilience. Throughout the discussion, he demonstrates how a fractional CFO can act as a strategic partner, helping founders balance ambitious growth with the financial discipline needed to build a sustainable business.
Key topics covered:
- How a fractional CFO helps profitable businesses avoid cash crunches by improving visibility into true costs and cash conversion
- Why food and beverage businesses are especially vulnerable to cash-flow problems due to thin margins and complex cost structures
- A client case where disciplined financial modeling and KPI tracking helped increase business performance 10x
- Practical strategies to balance passion for product with commercial viability, including pricing, cost allocation, and product mix decisions
- How Scotty uses AI tools and spreadsheets to build agile financial models and improve decision-making speed for clients
- Scotty’s longer-term vision of building a specialist team of food and beverage advisors to support more founders at scale
Links
Timestamps:
- 0:00:01 – Scotty’s background and journey from corporate accounting at Honey Baked Hams to becoming a fractional CFO for food and beverage businesses
- 0:02:57 – The personal and financial challenges of leaving a stable corporate role to build a fractional CFO practice, and the central importance of predictable cash flow
- 0:07:14 – Why the food and beverage sector is high-risk for cash shortages despite apparent profitability, and how thin margins amplify operational missteps
- 0:08:39 – Case study: managing a large retailer opportunity, understanding true costs, and avoiding overextending cash to chase volume
- 0:22:37 – Using cost analysis, pricing strategy, and product-level profitability to turn around a struggling taproom restaurant
- 0:29:21 – Leveraging AI (Claude, Gemini, Google Sheets) to power financial modeling and scenario analysis without heavy financial systems
- 0:40:05 – Advice for corporate finance professionals considering a move into fractional CFO work, including risk, reward, and impact
Find out more about GrowCFO
If you enjoyed this podcast, you can subscribe to the GrowCFO Show with your favorite podcast app. The GrowCFO show is listed in the Apple podcast directory, Spotify and many others. Why not subscribe there today? That way, you never miss an episode.
GrowCFO is a great place to extend your professional network. Join GrowCFO as a free member today and participate in our regular networking events and webinars. Premium members can also access our extensive training center and CFO Digital Toolkit. You can enroll in our flagship Future CFO or Finance Leader programs here.
You can find out more and join today at growcfo.net
Podcast: Play in new window | Download
