The Power of One cash equation: 7 cash-flow levers

Cash rarely fails in one dramatic moment. It leaks.

A little margin goes. Payment terms drift. Stock builds up. A project gets discounted to win the work. A supplier gets paid before the customer has paid you. Nobody sets out to starve the business of cash, but the effect is the same.

If cash is tight, you don’t need another vague finance meeting. You need to know which lever to pull, how hard to pull it, and who is avoiding the decision.

This is why the Power of One is useful. It isn’t just a seven-lever checklist. It’s a diagnostic for the financial decision the founder has been putting off.

Cash pressure is not abstract. The Insolvency Service recorded 1,878 company insolvencies in England and Wales in February 2026, while Sage and CEBR found in 2025 that 44% of invoices were paid late and £112b was locked up in late payments. The UK government also opened a 2025 consultation on late, long and disputed B2B payments because payment terms affect cash flow through supply chains. This is the world your finance team is operating in.

What is the Power of One cash equation?

The Power of One cash equation is a Scaling Up and Cash Flow Story tool that models the cash, profit and value impact of changing one financial lever by 1% or one day.

It was developed through the Cash Flow Story work associated with Alan Miltz, who co-authored the cash chapter in Scaling Up. Alan has also been a guest on The Melting Pot podcast with Dominic Monkhouse, where they talked about why revenue is vanity, profit is sanity and cash is king.

The point is simple. Instead of asking, “How do we improve cash flow?”, you ask sharper questions:

• What happens if price goes up by 1%?
• What happens if volume goes up by 1%?
• What happens if direct costs come down by 1%?
• What happens if overheads come down by 1%?
• What happens if customers pay one day faster?
• What happens if stock or work in progress reduces by one day?
• What happens if suppliers are paid one day later?

Once those numbers are on the table, the conversation changes. Cash is no longer an abstract problem. It becomes a set of choices.

Want to see it run against a real set of numbers? Why profitable businesses still go broke, and the 7 levers of cash that fix it walks through a worked example: a business posting record profit while its cash quietly halves, and what pulling all seven levers by 1% does to it.

Get the tool. Drop in your numbers. Ten minutes. You’ll never read your accounts the same way again.

The 7 Power of One levers

Lever	1% or one-day move	Cash speed	Decision risk	Natural owner	First question to ask
Price	Increase price by 1%	Fast	Medium	Founder, sales, finance	Where are we clearly undercharging?
Volume	Increase sales volume by 1%	Medium	Medium	Sales and marketing	Which profitable customers can we win more of?
Direct costs	Reduce cost of goods sold by 1%	Medium	Low to medium	Operations, procurement, finance	Which supplier, scope or delivery cost is drifting?
Overheads	Reduce overheads by 1%	Fast	Low to high	Founder, finance, department heads	Which cost would we not add again today?
Receivables	Collect cash one day faster	Fast	Low	Finance, sales, customer success	Who owes us money and why has it not been collected?
Inventory or work in progress	Reduce stock or WIP by one day	Medium	Medium	Operations, delivery, finance	Where is cash trapped before the customer sees value?
Payables	Pay suppliers one day later	Fast	Medium	Finance, founder	Which terms can change without damaging trust?

The table matters because it stops you treating every lever as equal. They are not equal.

Price can move cash quickly, but it creates fear. Receivables can move cash quickly, but it requires discipline. Inventory can release cash, but it may expose messy operations. Overheads are tempting because they feel controllable, but they are rarely the only answer.

The Power of One does not tell you to pull every lever politely. If cash is genuinely tight, pull the levers hard. But do it in the right order. Start with the biggest, fastest, least stupid move, then keep going.

Why price is often the lever everyone avoids

In my experience, price is usually where the fear sits.

The story in the room is predictable. Sales will complain. Customers will complain. We will lose volume. Competitors will undercut us. The market will punish us.

Sometimes that is true. Often it is not.

At New Signature, one of the practical moves was to increase price by 1% a month for 12 months. Customers did not notice. Salespeople noticed because the prices stopped being round numbers, but customers did not. In year two, the increase moved to 1.5% a month. Again, customers did not notice. The extra margin fell straight through to the bottom line.

That is the Power of One in practice. It is not a motivational slogan. It is a way to test whether the fear in your head is larger than the commercial reality in your market.

If a 1% price movement makes a meaningful difference to cash, the next question is not, “Can we possibly do this?” It is, “Where can we do this without being reckless?”

What numbers do you need?

You do not need a perfect financial model before using the Power of One. You do need enough truth to make the exercise useful.

Start with these numbers:

• Revenue.
• Gross margin.
• Direct costs or cost of goods sold.
• Overheads.
• Accounts receivable days.
• Inventory or work in progress days.
• Accounts payable days.
• EBIT or operating profit.
• Net cash flow.

If those numbers are hard to find, that is part of the answer. A founder running a scale-up cannot improve cash flow from a foggy dashboard.

How to run the Power of One conversation

Do not make this a finance-only exercise.

Finance can bring the numbers, but finance cannot own every decision. Price sits with the founder and sales. Receivables sit with finance, sales and customer success. Inventory sits with operations. Direct costs sit with procurement, delivery and the commercial model.

Use this rhythm:

1. Bring the seven levers to the table.
2. Model each 1% or one-day movement.
3. Rank the levers by cash impact.
4. Rank them again by speed and risk.
5. Pick the first two actions.
6. Assign one owner to each.
7. Review the cash effect every week until the pressure has gone.

This is where the Power of One becomes a management tool rather than a spreadsheet. The model tells you where the cash is. The weekly rhythm tells you whether anyone is actually changing behaviour.

Which lever should you pull first?

There isn’t a universal answer. That’s the point.

For one company, the answer might be price. For another, it might be receivables. For a project-based services business, work in progress may be the cash trap. For a product business, inventory may be the problem. For a founder-led sales business, discounting may be quietly wrecking the model.

Use this decision order:

1. Which lever creates the biggest cash movement?
2. Which lever can move inside 30 days?
3. Which lever has the lowest strategic risk?
4. Which lever has an owner who can act this week?
5. Which lever are we avoiding because it will create a difficult conversation?

That last question is the one that matters. Weak cash flow is often presented as a finance problem. In a scale-up, it is just as often a decision problem.

How the Power of One helps if you are planning for exit

If you are building towards exit, cash and profit discipline change the story buyers see.

An acquirer does not just look at revenue. They look at the quality of revenue, margin, working capital, cash conversion and whether the business can keep producing results without heroic founder effort.

The Power of One helps because it shows which small operating changes compound into EBITDA, cash and value. If you think the business could sell on a multiple of EBITDA, a 1% improvement in price, margin or cost control can have a much larger effect than it first appears.

But do not wait until the exit process to do this. If you only tidy the cash story when a buyer is already looking, you are too late. Start with getting cash flow right so it can fund growth, not with a last-minute exit deck.

What to do this week if cash is tight

Use the Power of One to create action, not insight.

By Friday, you should be able to answer these five questions:

1. Which of the seven levers has the biggest cash impact in our business?
2. Which one can we move inside 30 days?
3. Which customer, supplier, team or process is attached to that lever?
4. Who owns the decision?
5. What decision are we scared to make this month?

That last question is the reframe. The better question is not, “Which cash-flow lever should we pull?” It is, “What decision are we scared to make this month?”

If cash is tight, this is not an academic exercise. Pull the levers. Pull them hard. Then use the numbers to make sure you are not damaging the thing you are trying to save.

Frequently asked questions

Which Power of One lever should you pull first?

Start with the lever that creates the biggest cash movement, can be acted on within 30 days and has a clear owner. The best first lever is not always the biggest theoretical lever. It is the biggest lever you can move without creating a worse strategic problem.

What are the seven Power of One levers?

The seven Power of One levers are price, volume, cost of goods sold or direct costs, overheads, accounts receivable days, inventory or work in progress days, and accounts payable days. The first four affect profit. The last three affect working capital and the speed at which profit becomes cash.

What does Power of One mean?

Power of One means modelling the effect of a one-unit improvement. In this context, it means testing a 1% improvement in price, volume, costs or overheads, or a one-day improvement in working-capital levers such as receivables, inventory and payables. The point is to see which small move changes cash fastest.

Is the Power of One only about price?

No. Price is often the most emotionally difficult lever, and in many companies it has a large cash impact, but the Power of One looks at seven levers. The right starting point depends on your numbers, your risk and your ability to act quickly. Price matters, but it is not the whole tool.

Should you pull all seven levers at once?

If cash is under real pressure, you may need to move several levers quickly. But do not pretend they are all equal. Rank them by impact, speed and risk, then assign ownership. The danger is not moving too many levers. The danger is moving none because the team keeps debating.

How is the Power of One different from a cash-flow forecast?

A cash-flow forecast predicts what may happen if the business continues on its current path. The Power of One shows what could happen if you deliberately change one of the drivers. One is a forecast. The other is a decision tool that turns cash pressure into specific operating choices.

What should you do next?

If this has made you uncomfortable, start there. Cash pressure usually points to a decision you have delayed.

Four ways to take this further

1. Subscribe to the newsletter. Get direct, practical thinking on scaling, founder bottlenecks, cash discipline and building a company that can run without you in every room.
2. Listen to the Alan Miltz episode. Start with the conversation on why revenue is vanity, profit is sanity and cash is king.
3. Book a call. If cash, pricing or working capital is becoming a constraint on growth, I can help you work out whether the issue is strategy, execution, finance discipline or your role as founder.
4. Grab the tool. Drop in your numbers. Ten minutes. You’ll never read your accounts the same way again.

Your move. Open your management accounts. Pick the lever that makes you nervous. That is probably where the cash is.

What should you do next?

---

If this post has annoyed you slightly, good. The issue is probably not effort. It is design. The business is asking you to carry decisions, standards and exceptions that should now belong inside the team.

The goal is not to disappear. The goal is to build a company where your best work is not dragged back into every operational tangle.

That is the point. Scaling is not adding more people around the same bottleneck. It is rebuilding the business so the bottleneck is removed.

Four ways to take this further

1. Book a call. If growth is now making the company slower, heavier or more dependent on you, I can help you decide whether the constraint is people, strategy, execution, cash or your role as founder. No obligation, no pitch. You will know quickly whether this is the right kind of help.
2. Grab the book. F**k Plan B covers these principles in more depth, with the practical founder lessons behind customer obsession, honest communication, hiring, small teams and managers who coach.
3. Watch the £30m scaling video. Start there if you want the founder-level version of these principles, using Rackspace and Peer 1 as the proof base.
4. Subscribe to the newsletter. Get direct, practical thinking on scaling, founder bottlenecks, leadership rhythm and building a company that can run without you in every room.

Your move. Open Slack, Teams or your inbox. Find the decision that should not have come to you this week. That is where the scaling work starts.

About Dominic Monkhouse

Dominic Monkhouse scaled Rackspace UK and Peer 1 Hosting as Managing Director, taking both to a £30m annual run rate. He is the founder of Monkhouse & Company.