When starting a business, separate short-term cash flows from long-term cash flows

There is a strategy that I have seen very rarely discussed in entrepreneurial advice that I think is a critical driver for long term success of new businesses. This strategy involves developing a plan for both short-term and long-term cash flows.

There are a number of reasons why this is so important.

1. It is easy to see the long-term big picture, but harder to see the little steps needed to be taken to get there.

So many start ups have founders that have a big dream. It's easy to see yourself at the head of a corporate table delivering your biannual marketing strategy for your ingenious invention you created many years ago. It's more difficult to envision yourself scraping together short-term finance in order to afford to produce a minimum viable product which only MIGHT recuperate your initial investment, let alone the time spent. Creating a short-term cash flow goal allows the steps to become more clear on your path to the big time

2. Motivation can get stifled when not seeing financial return for reward.

It is incredibly difficult to spend 20 hours a week outside of your regular 9-5 if your business is earning no income. It's only natural for your passion to decrease dramatically if you don't see results in the early stages. A short-term cash flow can also provide you with a form of metric to assess current results while maintaining long-term goals.

3. You deserve to reap the benefits of your work today, as well as in the future.

For the most successful entrepreneurs, the peak of their success is always at some point in the future. The notion is that the hard work put in today will pay off at a later point in time. This rings true for everyone, including yourself if you maintain your work ethic and drive. For this reason, it's also valuable to include some short-term benefits or cash flow objectives so as to benefit the you of today. If you can live your best life today, this will give you the greatest sense of fulfillment and also have a compounding affect on the output you can achieve.

If you've got a business in mind, or are just starting out, what do you think are the best ways that you can immediately monetize your idea so as to separate short-term cash flows from long-term cash flows.

Take Advantage of Capitalism

As I was creating the previous post, it got me thinking about capitalism, or perhaps more specifically some of the negative opinions it seems to garner.

As this blog is not intended to have a political voice, I don't want to discuss the various advantages or disadvantages and come to a philosophical outcome of whether it's a beneficial system. If you're reading this alone, I imagine you have you're own tilt towards one side of the discussion anyway, but the fact is this: we live in a capitalist society.

Broadly speaking, we all have the capacity to become as successful as we like. It's easy to sit back and complain about how the wealthiest people control the bulk of the financial and political power of the world, but that's just how it is. Rather than allowing envy to overcome you to the point that you hate those in power, become one of those people.

If you're a philanthropist at heart, then join the wealthiest and most successful and use your newfound resources to help those around you. There are no insurmountable barriers to your entry. Any that you can think of are simply excuses you wish to make in order to justify laziness.

Take advantage of capitalism. It's not easy. If it were, everyone would do it.