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While the global startup culture is a relatively new concept, the necessity of cashflow is not. We all need cash, whether you're a business or an individual. One of the unmistakable necessities to success in launching a start-up and getting it at a sustainable level is building healthy cashflow. 

You've probably heard the cliché, "money makes the world go around." And while money isn't everything, its value is unmistakable. Money isn't the only goal of business, but it certainly is a powerful tool. We need a healthy inflow and outflow of money. You may have millions in start-up capital and angel investments, but unless we get that cash flowing in and out at a healthy level, your seemingly stable startup may have a problem.

No matter how big or how small an organisation is, challenges will always be there. And as CEOs, our job is to make the right decisions. One of the decisions we always need to make is to put premium on cashflow. Sales might drop, assets might be harder to liquidate, or expenses shoot up. Whatever the reason, cash might become a challenge. Even the most successful companies today have experienced that problem at some point.

Even the most successful businesses have had liquidity problems in the past.

So, what is a business to do to improve cashflow? The book Built to Last by Jim Collins and Jerry Porras looks at the history of some iconic global enterprises and how they dealt with their cashflow challenges.

In the book, we are introduced to the origins of 3M, Boeing, and Sony and how they overcame their cashflow issues. Each company faced their startup phase with ingenuity and one of them, 3M, spent so long creating innovative solutions to create cash flow that innovation became a core part of their processes. Let's look at each one in further detail.

 

Boeing - Build Cashflow Through Other Ideas

Boeing logo and aircraft interior

Anyone who has travelled multiple times by air, received air freight, or picked up friends from an airport has been touched by Boeing's products. The airline giant has had ups and downs. But today it is currently enjoying a resurgence due to their Dreamliner and increased air travel worldwide. 

It would surprise a startup CEO to learn that their first product was furniture. One of the world's largest aeroplane producers raised cash by manufacturing and selling furniture to get off the ground. That's how they got enough cashflow to become the airline giant that they are today. So maybe you have a dream product, but you don't have the means to it yet. Try out other ideas first that will then become your stepping stone to your true dream. Just as Boeing used furniture to conquer the skies.

 

Sony - Build Cashflow Through Affordable Products

Sony logo and playstation controllers

The electronics company which became synonymous with Japanese global economics started with their fair share of problems as well. Sony was founded in 1945 by a young inventor named Masaru Ibuka. The company's bedrock was built on a war-struck Japan- not the best times for a start-up to come about. Starting in a bomb-blasted apartment with only seven employees and $1,600 in savings, Jim Collins notes, Sony started by selling low-priced rice cookers.

While Sony had goals to be one of the largest companies in their niche, and they succeeded. It wasn't easy, but they found a strategy that worked: offering a product that they could easily and quickly produce and sell. 

 

3M - Build Cashflow Through an Innovative Culture

3M logo with stationary

If you are not familiar with the business name 3M, think Post-It Notes, Scotch Tape, Duct Tape, and reflective road paint. They were all invented by 3M. But the company didn't always have the influence they have today. What brought them there was their innovative culture.

The company started as Minnesota Mining and Manufacturing, 3M spent 15 years trying to break into the realm of mining and manufacturing before their innovative processes became a defining part of their business culture. Through innovation, they found a bigger need and focused on the niche that they later became very good at.

Whether your search for innovative cash flow is just a passing service you can offer on the side of your main goal, or something that becomes a part of your business process, you must find ways to bring the money in. This is your first goal as a startup CEO. 

 


 

Want more information about good startup business practices? Why not read some more articles from our blog?

How to win the startup game

 

Topics: Finance

Lisa Andrews

Written by Lisa Andrews

Lisa Andrews, after experiencing adversity in her life, decided to focus on positive momentum, intent on taking part in global conversations to make the world a better place. Having a data, engineering and financial background, she is on a mission to pave the way to give everyone a fair start in life and to maximise human potential. A serial entrepreneur, in 2018 Lisa won the Hunter Outstanding Young Entrepreneur of the Year. She is founder and part owner of several companies that all focus on profit with purpose. Lisa is currently working on projects with Singularity University, the United Nations, ACTAI, the Extreme Tech Challenge, Arm, Treasure Data, 2030vision.com, Ocean Elders, Unicef, EO, GSEA and others. Lisa's focus is on projects that aim to solve the world's greatest challenges using exponential technologies, beginning with achieving the UN Sustainable Development Goals. Lisa is passionate about creating a vision for the world for the next 100 years. In her spare time you’ll find her reading, travelling to exotic locations or kite surfing.

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