29yo COO of $16M family business: profitable on paper but cash-flow negative and now behind on rent. What would you do?

★★★ signal-strong r/smallbusiness · ↑ 360 · 💬 330 · 2026-02-20 · kw: buy box price · open on reddit ↗

Tool

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Issue

Logistics company with $16M revenue experiencing persistent cash flow crisis ($300k behind on rent, $100k/month fixed costs, 1-1.5% margins) despite being profitable on paper, caused by lost major customer post-COVID, inadequate financial systems, and inability to collect AR on time (customers stretching payments to 60+ days).

Cost

$300,000 back rent owed; $60,000/month cash flow improvement needed; $750,000 line of credit exhausted; consistent monthly cash flow deficit despite $200k net profit on paper

Recommendation

Implement 13-week rolling cash flow forecasting (week-by-week tracking of inflows/outflows); aggressively improve AR collection; reduce fixed costs by relocating to smaller space or subleasing warehouse capacity; cut unprofitable customer lanes and pricing optimization

Date context

as of 2026-02-20; COVID disruption occurred ~2020; PPP relief exhausted by ~2022; 1.5 year cash flow crunch; operational system rolled out 2023

extracted with

anthropic/claude-haiku-4.5 · 2026-05-08

Body

I am a 29 year old COO for our family business. We are in the logistics side of wine and spirits transportation. My dad started the company about 30 years ago and built a very successful business over time. I joined about 6 years ago doing order entry and eventually took on my first real project building and testing a new proprietary operating system, which we rolled out at the beginning of 2023. About a year and a half ago we were having some operational challenges and I asked my dad to trust me and give me control over operations. With his blessing, we made some major changes and have seen significant improvements in processes and customer feedback. We are not perfect and still figuring things out, but for the first time in our history we are measuring success and failure, clarifying roles, getting the right people in the right seats, and trying to drive efficiency. We have also made big improvements in company culture, which is something I’m really proud of. While operations are moving in the right direction, we are really struggling on the financial side. We have about 65 employees. My dad has always been more of a “fly by the seat of your pants” operator and never really built strong financial systems or used data to drive decisions. From 2015–2019 (before I joined), the business was doing extremely well. He was buying equipment, growing sales, and making a lot of money. During that time he also started purchasing a lot of personal assets through the business. When COVID hit, everything changed. Demand spiked but our operation was strained and we had to move into a new building that was about double the size. In doing so, our rent went from about $29k/month to \~$100k/month. Around that same time, we lost one of our largest and most profitable customers (a government account that changed their model entirely). Between the higher fixed costs, the lost customer, and general chaos from COVID, it was kind of a perfect storm. PPP and other relief programs helped keep us afloat for a couple of years, but since then we’ve been in a slow financial decline. Today we are doing about $16M in revenue, but only around \~$200k in net profit (\~1–1.5% margins). A quick snapshot of where we are now: * Revenue: \~$16M annually (\~$1.3M/month) * Payroll: \~$400k/month * Rent: \~$100k/month * Currently about \~$300k behind on rent * AR: most customers pay within 30 days, but some stretch to 60+ and we have to chase * AP: some vendors we keep current, others we’ve stretched to 60–90 days We are generally profitable on paper, but consistently cash flow negative due to timing and thin margins. We’ve been in a cash flow crunch for about 1.5 years now. My dad has put in personal investment money, taken on multiple short-term loans, and we’ve exhausted a $750k line of credit. At times we’ve had to delay vendor payments just to make payroll. We were recently approved for a financing package with TD Bank to consolidate debt. This will actually improve monthly cash flow by about $60k by reducing current debt payments, which helps in the short term. That said, it also feels like it’s just kicking the can down the road because most of the immediate liquidity gets eaten up quickly (for example, covering back rent). From my perspective: * We grew too fast without proper financial systems * Our margins are too thin to absorb delays in cash collection * Fixed costs (especially rent) are too high for our current revenue * There has been a lack of financial discipline historically, including personal expenses running through the business * Operationally we are improving, but financially we are unstable On my end, I’ve been focused on what I can control: * Cutting unprofitable work and lanes * Reducing headcount where needed * Looking at pricing and rate increases * Trying to improve efficiency across the board I believe we can improve margins over the next few months, but I don’t know if that alone solves the bigger problem. One of the biggest challenges is that I don’t have ownership in the business yet, so my leverage is limited. My dad understands how serious things are and is clearly stressed about it, but he has said he is not willing to sell personal assets at this point. His mindset is basically “I’ve never gone backwards in 40 years and I’m not starting now.” I understand the pride in that, but I also worry about where that leads if things don’t turn. So I guess where I’m struggling is this: If you were in my position: * What would you prioritize first: cash flow, cost cutting, or margin improvement? * Is this realistically fixable without a major capital injection or asset sales? * How would you handle a founder who understands the problem but resists the financial decisions needed to fix it? * At what point do you decide to walk away from something you don’t ultimately control? Candidly, I deal with imposter syndrome every day being 29 in this role without a real mentor, and I’m trying to learn as much as I can, but I’ve never been through something like this and don’t know many people who have. Appreciate anyone who took the time to read this and respond. Happy to answer any questions that would help add more context.

Top comments (8)

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[score=479] Own_Regret_9091

Your dad spent 30 years building this but the fundamentals changed after COVID and he's not adapting - that rent alone is killing you at current margins and no amount of operational efficiency fixes that math.

[score=254] leks_t

That is a though situation to be in and I emphasize with your situation. The single most important thing you can do right now is start tracking cash on a 13-week rolling basis, and I mean this week, not when things settle down. What you need is a week-by-week map of exactly what cash is coming in, when it lands, what is going out, and on what specific date it leaves. The reason this matters so much is that it completely changes the conversation with your father. Right now you are telling him you are in trouble, which is abstract enough for someone with 40 years of survival instincts to wave away. A document that says "on March 14th we cannot make payroll" is not something anyone gets to dismiss. After that, go after your accounts receivable immediately, because customers sitting at 60-plus days are holding your cash in their bank accounts and calling it normal. Find out what the standard payment term is in logistics, call your customers, and start moving toward that number aggressively. Send invoices as work is completed rather than waiting until the end of the month. None of this requires your father's sign-off. It is entirely within your control today, and the cash impact shows up fast. On the rent, your landlord already knows you are behind, so there is nothing to gain by avoiding that conversation any longer. A landlord losing a 65-person tenant and sitting on an empty warehouse is in a far worse position than one who cuts a deal with you, and most landlords understand that math better than you might think. Go to them directly, be straight about where things stand, and put something concrete on the table. The harder thing is your father and your job is not to convince him of anything. I would not say that his resistance is not irrational stubbornness. When someone builds something from nothing over four decades, "I have never gone backwards" stops being a business strategy and becomes an identity. Pushing back on the finances feels to him like an attack on his life's work, which is why every argument you make lands as a threat rather than a solution. What actually moves people like that is not a better argument. It is reality made undeniable. Put the 13-week cash map in front of him without a lecture attached, and let his own judgment do the work. Last thing, I would privately decide what your line is. Before you are exhausted and running on fumes, define the specific condition that tells you this is no longer recoverable under the current structure. Missing payroll, your father blocking the AR changes, whatever it is for you. The point is that having that threshold decided in advance means you make that call from a clear head rather than from the wreckage of burnout. The business may or may not make it through this. The operator you are becoming in the process goes with you either way, and that is worth more than most people realize.

[score=103] Deathstream96

Cash flow cures all, that’s where’d I’d start, but I don’t know how you do that without cutting bottom line. 100k rent is having you circle the drain. I was always preached low fixed costs. It has so far, not failed me. It creates “wiggle room”. High labor this month? Doesn’t matter low fixed costs. High cogs this month? Doesn’t matter. I understand easier said than done, but it sounds like dad may need a reality check. He may not want to sell personal property now, but what about 3 months from now when you can’t hit payroll, and can’t sell the property fast enough? Blowing through a 750 line of credit, is a strong sign, it’s not good

[score=101] MaximumUltra

For a company that’s been around that long with those financials you should have bought a warehouse to eventually cut rent as an expense.

[score=39] ARCHFUTURA

Do you need the bigger space still? Payroll and rent is 6mil where’s the other 10mil go? Are you selling just one thing or many? Is 80% of your rev coming from 20% of clients?

[score=37] pizza_tron

You said it right here: "rent went from about $29k/month to \~$100k/month. Around that same time, we lost one of our largest and most profitable customers (a government account that changed their model entirely)." Fix those things are you are starting to look normal again.

[score=32] Cultural-Bathroom01

I skimmed the latter half ... "cash flow, cost cutting, or margin improvement" -- cash flow and cost cutting Do you have a sales team? If you lost a giant client, can you move back to the smaller space? If that would take too long, can you reduce your footprint in the warehouse and sublet some space? Lots of ppl dont know what they are doing, figuring it out as they go, they just dont admit it. Be sure to try and take a few minutes each day to stop and zoom out.