7 Principles for Cash Flow Kings





Cash is king. Cash flow* keeps you king.  Kings own their business; creditors need not apply. Kings choose their journeys and who can join them. It’s good to be king.

With that in mind, here are some principles that can serve to either keep you king or help you be a king in your business, king of cash flow.

Education.

Start with yourself. Are positive cash flows meaningful to you as the organization’s leader? Why?  Do you measure it? Would you be able to answer, if asked, how much cash-flow do you generate each month?  How long would it take for you to find that answer?

Can you explain what it may mean to everyone in your organization? (survival, ownership, control, freedom, growth, new equipment, new hires, no layoffs, incentives, R&D…)

Are you not sure you want feedback from others? Read on.

Connection.

Connect the dots. Connect the lines on the org chart. Connect your strategy. Connect its execution. Connect their tasks. Connect their success.

Connect what they do and why to how it adds or subtracts to generating positive cash-flow.

Connect what they do and why to what it means for them personally. See above.

It’s one thing to offer a classroom definition of cash-flow and its sources. It becomes entirely different when you connect your strategy, its execution, their tasks, their strengths, their successes and non-successes, to generating cash-flow and the options it provides.

Recognition.

Recognition by our peers, family and our leaders is at or near the top of personal motivators. Any organization, any size, any culture*.

That motivator applies to increasing cash flows in your organization. Recognize the successes of everyone in your organization for how they contribute to reaching positive cash flows.

Some successes will add cash by increasing revenues. Some successes will save cash by cutting costs. Recognize them.

Engagement

How? Ask.

  • What would happen if we …?
  • What if we…?
  • How could we…?
  • What is our reasonable aspiration or hoped-for future that Erika Andersen talks about in her book Being Strategic.

Operative word is ‘we’. Everyone’s participation then provides theirs answer for these questions:

  • What’s in it for me.
  • Why should I care?
  • Why should I believe?

Inspiration

Now you’re aligned. Now you’re engaged. Now you’re learning. Now you’re finding more solutions. Now you’ve inspired. Now everyone’s inspired.

Repetition.

You will repeatedly turn to these principles. Success brings greater challenges. Greater challenges need greater solutions.   Now you have a culture of connection as Michael Lee Stallard talks about, a culture of continuous learning as Gary Harpst calls it.

Reminder

It’s an endless journey. You, the plural you, will need each others help.

* Broad generalizations like this are always dangerous. I usually recoil from a post when I read them. I make it here for brevity’s sake.

* Operating cash flow may be the more accurate term here. The term cash flow can include outside sources of cash: investments, loans, etc. But these sources can come at the cost of being the king, your culture, your brand, your company.

Links:

Being Strategic: Plan for Success, Out-Think Your Competitors, Stay Ahead of Change by Erika Andersen

Six Disciplines of Excellence by Gary Harpst

Fired Up or Burned Out, by Michael Lee Stallard

iStock Photo from ivan_7316

7 Comments ▼

Zane Safrit Zane Safrit's My passion is small business and the operations' excellence required to deliver a product that creates word-of-mouth, customer referrals and instills pride in those whose passion created it. Zane's blog is Zane Safrit.

7 Reactions
  1. Thanks for all the RTs everyone! @zanesafrit

    Thank you, Anita, for building this resource!

  2. Thanks for the plug 🙂

    The Franchise King

  3. Zane: Great post. I think that people will understand the importance of cash flow if they see how it has a huge impact on the whole organization. As an experienced purchaser I could see how I could improve the cash flow if I got good terms of payment and if the credit analyst at the finance department could collect the money from our customers quicker than we are paying our suppliers, then you are creating a positive cash flow. You have to an overview of the whole chain.

  4. Thanks for this great post! In case anyone else is looking for a cash flow blog that perfectly complements this post, I would recommend checking out…

    http://blog.greensherpa.com/index.php/personal-finance/what-is-cash-flow-and-how-to-improve-it/

  5. Great post. Cash is king and without it there is no freedom. Great links as well.