how to get your business off the ground, Cash Management

how to get your business off the ground, Cash Management

Know that a business operates like an airplane. How do you know if it’s about to crash or not? To answer, it is above all important to understand the dynamics of a flight. […] Using the airplane analogy, I’m going to walk you through five areas of the aircraft that must work together for it to fly. Each represents an aspect of your business. The balance between all these areas avoids the crash.

#1. The fuselage: overhead

[…] The aircraft fuselage equals your overhead. They include salaries, health benefits, rent, office supplies, etc. These expenses are necessary to solve the difficulties of your customers, in exchange for certain sums of money.

#2. Wings: products and services

[…] Everything you sell – your products and services – gives your business lift, acting like wings. Without profitable deals to market, no breath (or turnover) will cause the plane to take off.

#3. The Right Driver: Marketing

The engines propel the plane. A single-engine will probably make do with a marketing budget, but a sales team will complement a twin-engine. […] You must prioritize marketing, before any business endeavors. Indeed, marketing operations will generally prove to be less expensive, but crucial for your sales force.

#4. The left engine: the sales department

True, a twin-engine aircraft can hover with only one of its engines, but turn on the second, and the craft will move with greater thrust and lift. It will then be able to fly faster and farther, its fuselage will be able to get bigger, and you will employ more personnel to solve the problems of your more numerous customers.

Your second driver is your sales effort. Your sales team increases your turnover, which allows the company to grow and move forward.

#5. The fuel: working capital and cash

Finally, an airplane needs fuel. Regardless of its performance or weight, without kerosene it will crash. The latter represents cash (or cash flow). Without this cash, a business may hover for a while, but eventually it will hit the ground – and everyone on board will lose their source of income.

If you’re starting a business, you may use loans or work with investors, but ultimately any structure is about operating with positive cash flow. Having enough cash is arguably the most important factor for the success of your organization.

Maintain flight balance

[…] You need to have one or more profitable products that customers want, and put in enough marketing and sales effort to bring them to market. Also, you need to make sure that your overhead doesn’t slow down your device and have enough cash to pay your bills.​[…] All areas of your device must constantly be balanced.

[…] Check that the sales generated by the left and right engines cover overhead, generate profit margins and provide job security. Continuously increase your production, sales and marketing performance.

A good leader is obsessed with performance. Like an aeronautical engineer, he always seeks to create a lighter, faster and more efficient machine. In other words, he ensures that the activity/production ratios are high in order to grow his capital.

Donald Miller is the author of the book “Business for all in 60 days”, published by Pearson in October 2021.

The author:

Donald Miller is CEO of Story Brand, which helps 3,000 business leaders clarify their brand messages each year. He is one of the most publicized speakers in the United States, recognized for his talents as a storyteller. He’s the host of the Business Made Simple podcast. This text is taken from his book “Business for all in 60 days”, published by Pearson in October 2021, 248 pages, 25 euros.



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