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Just Focused on Creating Positive Cash Flow

As indicated by Wikipedia an Entrepreneur is somebody who will dispatch another wander or venture and acknowledge full duty regarding the results. He or she is looking for benefit using activity and the acknowledgment of individual hazard. But then sooner or later in the mid-1990s business enterprise got to be subverted. Each man and his pooch turned into an overnight business person – due in no little part to the simple access to cash. Every one of that was required was a very much made strategy for success, a smart PowerPoint presentation, rousing “lift pitch” and adequate tirelessness to persuade some organization or suspicious outsider to loan them the cash. Whether the arrangement was reasonable, thoroughly considered past “secure financing” or whether there was really a business opportunity for the offering appeared to be optional as more individuals announced themselves a “business visionary” and jumped on board the dotcom express.

Individuals would refer to organizations like Amazon as cases of organizations that didn’t make a benefit for a considerable length of time but then are esteemed in galactic figures. Be that as it may, for each Amazon there are a large number of disappointments who bit through the subsidizing with luxurious workplaces and smooth promoting effort just to overlay before making any benefit at all.

But let’s get real here – a business is not a business and you are not an entrepreneur until and unless you are generating positive cash flow. Cash flow is king. It is the lifeblood of every business. The business people we really respect are the ones who have lifted themselves up to success through sheer hard work, determination and strategy. They are the people who couldn’t get “seed funding” or “capital injections”, the ones that had to be smart and savvy to make ends meet and find ways to generate income from the start. They are the real entrepreneurs.

The real entrepreneurs are still using their initiative to manage risk and generate a profit but their focus is on acquiring or creating cash flows not on creating endless business plans that look good on paper but deliver nothing of value in the real world. In an era of easy money and get rich quick schemes we have forgotten one of the golden rules of successful entrepreneurship; create something that people want and are willing pay for.

What is the point of being in debt if the business you own or the assets you own don’t produce an income that is greater than the money needed to service the debt? In business we sometimes talk about the size of the entity as a means of avoiding the issue of cash flow and profit. Who cares if your business has a turnover of $50 million, if the business is spending $51 million there is no positive cash flow and no real business. If you’re still unsure about this distinction;

Repeat three times daily until the delusion goes away;

With cash flow I’m an entrepreneur; without it I’m not…

It’s impossible to create genuine wealth without income or cash flow – a fact that has been known for thousands of years although conveniently forgotten in recent history.

Even the ancient Babylonians knew this truth over 8000 years ago. George S Clason talks of this Commandment in his classic little book The Richest Man in Babylon. He refers to it as “The Third Cure” to a lean purse which states, “Put each coin to labouring that it may reproduce its kind even as the flocks of the field and help bring to thee income, a stream of wealth that shall flow constantly into thy purse.”

Successful entrepreneurs are always looking for streams of wealth that will constantly flow into their purse. They do that through buying or creating entities that generate income or cash flow with or without their daily involvement. That could mean buying positively geared investment properties, shares that provide a dividend or investing in or creating a successful business. It is the positive cash flow that makes these equity investments viable because they generate money instead of spending money. A real entrepreneur is not interested in “paper profits” or inherent value – they are seeking positive cash flow which can be used to buy additional wealth creating assets or re-invest in the business. A business is only viable and genuinely wealth creating if it makes more than it spends and generates cash flow for growth and investment. It is the cash flow that feeds the business, allows it to prosper so that the business can eventually be sold and its value realised.

If you’re a business owner seek out every possible way to reduce your expenses, increase your sales and improve your ability to generate not just one, but many cash flow positions. This is what the most successful business people do to become wealthy. They create or acquire ‘cash flows’ for a future sale or exit. If you own assets ensure they are positively geared and that you are generating and acquiring positive cash flow[s] at all times. The future success of your enterprise depends upon it.