MY CASH FLOW STORY

It was February 14, 1988; I had left a cushy VP Finance job at the second largest floral wire service & gift container company in the world and took the position of CFO for an entrepreneurial start-up/turnaround. Why? For the thrill and experience of taking a struggling natural foods snack bar manufacturer from the health food industry into the mass market.

 

I had only been on the job for one week when I got the phone call late Sunday afternoon. Valentine's Day. The Controller had been working the weekend, crunching numbers. "We can't make payroll next Friday," he said. Three hundred employees. No cash. No credit line left.

 

Talk about a punch to the gut. In my prior life, I had worked for Fortune 500 companies (Mobil Oil, Mattel, PepsiCo) in financial roles and had never experienced cash flow problems. At Taco Bell (PepsiCo subsidiary, at the time), I was the cash manager handling $250+ million in annual cash! Never a problem.

 

I did my best to enjoy Valentine's Day with my wife and family, then got into work extra early Monday morning to execute my game plan. I thought about my predicament for about 15 minutes while mentally flashing back to my undergraduate and graduate business school finance classes. What came to mind was a classic textbook response: reduce outflows and increase inflows.

 

So I put a strategic halt to vendor payments and then went through our Accounts Receivable, identifying all major accounts with late or significant outstanding balances. I proceeded to dial for dollars, offering sizeable, one-time discounts if they paid their outstanding balance that week. Then I went to each office and collected the checks myself. We made payroll and I learned an invaluable lesson: Cash is King, and nothing ages an executive like being short of cash!

 

I immediately implemented a daily cash report as well as weekly, monthly, and quarterly cash flow projection reports and ensured cash flow was discussed at each week's operations meeting. We also implemented many cash flow management strategies and KPI's for tracking results.

 

I wish I could say we never had any more cash flow problems but, when you grow a business by ten-fold in six years, you're going to have challenges. The difference is, I always knew where we stood from a cash position.

 

Despite showing a decent quarter from a profit standpoint, everything that looked solid on paper meant nothing. That moment taught me a fundamental truth that most business owners never discover: profit and cash flow are not the same thing. And focusing primarily on profit can create constraints that limit everything you're trying to build.

 

From there, I went on to be involved in several bootstrapped SMB start-ups as well as taking on the turnarounds of four different struggling business units of larger firms. Cash flow was always top of mind, and I never forgot the lessons learned at my first entrepreneurial company.

 

Final comments...

That experience shaped the rest of my career.

 

Growth and expansion are the natural ambitions of every business owner who wants to build something meaningful and enduring. Nearly every successful company started as a small business. Growth is possible—but it is rarely linear, and it is never easy.

 

What I learned early—and then relearned repeatedly across startups, turnarounds, consulting engagements, and more than 170 owner-led businesses—is that cash flow is the constraint that ultimately determines what is possible.

 

You can have a compelling vision.

Strong demand.

Capable people.

And respectable profits on paper.

 

Yet still find yourself unable to pursue opportunities because cash simply isn't available.

 

That's why so many businesses struggle during periods of growth.

 

It's rarely a lack of effort.

It's rarely a lack of ambition.

 

More often, it's the absence of a disciplined approach to managing cash flow as an operating system rather than simply a financial result.

 

From that first week as a CFO facing a payroll crisis, one lesson has remained constant throughout my career.

 

Cash Flow Creates Options.

 

The option to invest when opportunities appear.

The option to grow without creating unnecessary financial pressure.

The option to reduce debt instead of depending on it.

The option to weather uncertainty with confidence.

The option to build a stronger, more valuable business.

The option to create greater wealth and enjoy a better quality of life.

 

Those options don't appear by accident.

They are created by thousands of better business decisions made consistently over time.

 

Whether you adopt the BusinessWiser™ Cash Flow Mastery System or develop your own approach, the principle remains the same.

 

Cash flow must be visible.

It must be discussed.

It must be forecasted.

And it must become part of everyday business decisions—not something reviewed after the fact.

 

Because when cash flow becomes part of how you lead, you don't simply improve financial performance.

 

You create more options.

And in business, options change everything.

 

I learned that lesson the hard way.

My hope is that you don't have to.

 

May your business be strong,

your decisions deliberate,

your cash flow disciplined,

and your future filled with options.

 

Regards,

Robert S. Livingston