The problems most teams think they have fixed are often still active and still burning cash.
During 2025, I have carried out three operational reviews within months of a cash injection.
In every case, both the management team and funders had prepared detailed cash flow forecasts. The business had plenty of cash headroom, at least according to the model. The plans looked solid, the assumptions stacked up, and on paper, there was breathing space.
Yet each one was back under pressure far sooner than expected.
The problem was not the forecast. It was the assumption that behaviour would change once the money arrived.
The Comfort of a Fresh Start
When new capital lands, it creates a natural sense of relief. The board breathes again, the management team focuses on delivery, and there is a quiet belief that this time will be different.
But cash does not reset habits. It magnifies them.
If inefficiency is still baked into the business, new capital only scales it. The result is usually a larger organisation with the same issues and a shorter runway.
I remember feeling that same relief when I was running an AIM-listed business raising fresh investment.
After months of pressure and uncertainty, the day the funds landed felt like the weight of the world had lifted. I genuinely believed that with new capital, everything would click into place.
Looking back, I can see that my view was too inward. My mind was closed to outside perspective. Of course, I believed the business was optimised and that my plan was right; every CEO does. Now, having spent years on the other side conducting operational reviews both before and after new funding, I realise how much value I would have gained from having someone like me then, a fellow operator offering an unbiased, supportive view through clear rather than rose-tinted glasses.
That is the difference perspective makes. You can be talented, experienced, and committed, but it is hard to challenge your own assumptions from inside the noise.
Legacy Issues?
The term “legacy issues” gets used a lot in these situations. It gives the impression that the problem sits somewhere in the past.
But if it is still consuming cash, it is not legacy; it is live.
I have reviewed cost lines described as “historic overspend” where the same supplier invoices were still arriving every month.
The only thing historic was the description.
Most of the time there is no bad intent. Management teams are tired. They have fought hard to get the deal done, the funding agreed, and the business stabilised. When the money lands, it feels like the hard work has been rewarded. But that sense of relief is exactly what allows inefficiency to slip quietly back into the system.
When the Forecast Is Right but the Execution Is Not
Each of those 2025 reviews had one thing in common: the forecasts were financially sound but operationally disconnected from reality.
Margins slipped.
Stock held longer.
Costs drifted.
The numbers were not wrong. The behaviours were.
The assumptions built into the cash flow models relied on tighter execution than the business was capable of delivering at that point. Cash was lost through habits, not arithmetic.
That is why every capital raise should come with an operational check. Forecasts do not fail because of maths; they fail because of execution.
The Real Cost of Unfixed Inefficiency
If a business runs at a 50% gross margin, every £1 of wasted cost needs £2 of new sales just to stand still.
That is why businesses can look busy, post growth, and still have no cash. The more they sell, the faster they burn.
It is not a funding problem. It is an operational one.
Capital Amplifies Whatever It Finds
New capital does not change the fundamentals of a business. It amplifies them.
If the business is efficient, capital compounds performance.
If it is inefficient, capital compounds loss.
That compounding effect behaves much like an exponential function. Small inefficiencies do not stay small. They multiply quietly across stock, margin, and working capital until they become something much larger. The same rule applies to discipline: when good habits compound, performance accelerates just as fast.
Numbers report what operations have already decided. The truth always starts on the shop floor, not in the spreadsheet.
Growth, good or bad, is rarely linear. It either builds or erodes exponentially, depending on what the business is feeding into it.
Working capital starts to stretch ahead of sales.
Headcount grows faster than output.
Procurement terms remain unchallenged.
Sooner or later, a line appears in the board pack that says it all: “Legacy issues took longer to unwind than expected.”
They did not take longer. They were never fixed.
Before the Next Injection
Before any follow-on funding is approved, one question matters above all others:
“Has the business earned the right to use this cash efficiently?”
If the answer is not clear, it is time for an operational review.
Not a financial audit or a cost-cutting exercise, but a practical look at how the business actually runs, how decisions are made, where time and cash are tied up, and whether the structure supports discipline or drift.
The aim is to make sure the business can convert capital into progress rather than waste.
Why It Matters
I worked with one business that had raised twice in two years. The team were convinced the problem was external: tougher market conditions, delayed contracts, and general economic uncertainty. Yet when we mapped where cash was really going, the gaps were internal.
Decisions were slow.
Margins were not owned.
Projects ran on without closure.
Once we introduced rhythm, weekly cash reviews, short decision cycles, and visible accountability, the cash position stabilised within a quarter. No new funding. No restructure. Just focus.
It is rarely glamourous work, but it is the kind that sticks.
Closing Thought
If it still costs you cash, it is not legacy. It is live.
And if you fund inefficiency, it grows with the business.
Capital is a powerful tool, but only when the business beneath it is ready to use it well.
That readiness comes from rhythm, discipline, and clear operational control, not the next injection.
