Guest Post: The Importance of Cash Flow for Startups
John Chambers, CEO of Cisco, recently said that in the current economic climate: “Cash is King, Queen and the Royal Family”. Judged from this perspective, startups probably belong to the most fanatic royalist in the world, since cash is for each and every startup the primary constraint. Yet, up to half of the available money at startups is wasted!
The deep recession we’re living through makes cash an even scarcer resource. Most companies find it difficult to generate positive cashflow. Consequently, investments and expenses are slashed, dominoing the cashflow problems throughout the economy. Banks are extremely prudent to renew creditlines and often simply refuse to provide new customers with credit at all. Investors stock their funds for emergency assistance to their most promising portfolio companies. Even a hot area like Cleantech now sees venture capital dry up (see this article in Wired or this article in the New York Times.).
What advice is available for startups, investors and companies? Well, the best advice is that there are many ways to improve cashflow of high-tech startups. Unfortunately, many CEOs focus on strategies to improve profitability or cut the losses. Out of the twenty best business books for startups, merely seven mention the CF-word. Not a single book addresses strategies how to optimize cashflow. Most books assume the availability of cash as a given. Indeed, most books emphasize how to win funding, after which an entrepreneur has the capital for the execution of the most profitable strategy.
Not so at TimeToCash.biz. We believe a strategy should first and foremost deliver positive cashflow. We believe execution should be done in such a way that cash is not wasted and the time it takes to generate cashflow from sales is as short as possible.
The book “Time To Cash – The 7 Keys to Successful High-Tech Startups” helps you put together such a strategy. And more importantly, it helps you to execute the strategy, because execution is everything. See what other readers say of this book.
Upcoming events
- 7 May 09 - Hans delivers a keynote speech at the European SME Week in The Hague, Netherlands. Go here for more information.
- 13 May 09 – Litams comes out of stealth mode. Litams is a startup set up and managed according to the principles of the book “Time To Cash”.
- 4 June 09 - Hans speaks at the World Investment Conference, in La Baule, France.
- 18 June 09 - Hans delivers a speech at the Hardware Conference.
Hans Vanderhoek
Posted by: Laura | Category: Generic
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Fantastic blog about cash flow.
Thanks.
Posted by debtor finance on July 02, 2009 at 11:41 AM BST #