By Bob Baker, Owner of Baker Garrington
A strong year doesn’t just start with more work, it starts with better cash flow planning.
Every January, we talk with business owners who are optimistic, motivated, and ready to grow. But many are still relying on reactive cash flow decisions instead of a clear plan. The businesses that separate themselves early in the year are the ones that understand their numbers, use financing strategically, and take full advantage of the tools available to them.
This guide breaks down how to think about cash flow the right way and how to start the year in a position of strength.
Use Factoring Strategically, Not as a Crutch
One of the biggest misconceptions we see is that factoring means factoring everything. In reality, very few businesses should.
Factoring works best when it’s used intentionally, not automatically. The goal isn’t to give up margin on every invoice; it’s to maintain liquidity where and when it matters most.
Working with the right finance partner means:
- Understanding which invoices should be funded
- Knowing when to pull back and self-fund
- Using factoring to support growth, not mask inefficiencies
When factoring is done correctly, it becomes a cash flow tool, not a permanent dependency.
Know Your Business and Know Your Numbers
Strong cash flow planning starts with clarity.
Business owners who succeed long-term know their:
- True operating costs
- Margins by customer or job
- Payroll timing and exposure
- Seasonal slowdowns and cash gaps
If you don’t know your numbers, cash flow decisions become guesses. When you do know them, financing becomes a strategy instead of a reaction.
Taking the time to understand where cash is coming in, where it’s going out, and where pressure points exist allows you to plan ahead rather than scramble later.
Use Credit Checks Before You Bid the Job
Growth can be dangerous if it’s not informed.
Before you take on a new customer or submit a large bid, credit checks can help you:
- Avoid customers with poor payment history
- Set better terms upfront
- Reduce collections issues later
Knowing who you’re working with before the job starts protects both your cash flow and your time. It’s one of the simplest ways to prevent avoidable cash flow problems before they ever show up.
Attract and Retain 1099 Contractors With Faster Pay
In today’s market, reliable contractors have options.
Quick Pay programs help businesses:
- Attract higher-quality 1099s
- Retain top performers
- Reduce turnover and downtime
When contractors know they’ll get paid quickly and consistently, your operation becomes more attractive and more stable. That reliability translates directly into smoother operations and stronger cash flow.
Turn Fuel From an Expense Into a Revenue Opportunity
Fuel programs shouldn’t just save a few cents at the pump.
With the right structure, fuel can become a shared revenue opportunity. A true 50/50 partnership between your business and your 1099 contractors. That means:
- Savings at national and local fuel stops
- A growing fuel network aligned with where work actually happens
- Shared upside that benefits both sides
When fuel is structured correctly, it becomes another way to strengthen loyalty while improving the bottom line for everyone involved.
Build a Cash Flow Plan That Works Beyond the Short Term
The businesses that start the year strongest aren’t chasing quick fixes. They understand their numbers, know when to use financing and when to step back, and put tools in place that actually match how they operate day to day. Factoring, credit checks, faster pay options for 1099 contractors, and fuel programs all work best when they’re part of one thoughtful strategy, not used in isolation.
A strong cash flow plan often includes:
- Factoring only where it makes sense, not on every invoice
- Clear visibility into costs, margins, and timing gaps
- Knowing a customer’s credit history before taking on work
- Paying contractors faster to attract and keep the right people
- Turning fuel from a simple expense into a shared opportunity
- Bringing everything together into a plan you can rely on
When these pieces line up, cash flow becomes more predictable and running the business gets a whole lot less stressful.
Start the Year With Clarity and Confidence
Starting the year strong isn’t about doing more. It’s about making smarter decisions with the tools already available to you.
If cash flow has felt reactive, tight, or unpredictable in the past, this is the time to step back and look at the bigger picture. With the right plan, financing becomes something you control and not something that controls you.
Let’s have a conversation about your business, your goals, and what you want this year to look like. The goal isn’t a short-term fix. It’s a cash flow strategy that supports growth, stability, and peace of mind all year long.