Tim Bates, Dan Kinsella,
Jim Moar & Kent Lillemoe
for the MESA Organisation
A Call to Arms about Cash Management
For many companies, time is money. For early-stage companies, money is time. This framework underscores this brutal reality.
You need loyal customers and super-duper products for startup success. However, they're rendered useless if you don't respect the fact that cash will always be king, and you need it to survive.
A simple truth, cash-flow surprises kill many startups. One out of three startups dies from a cash crisis. Therefore, as an entrepreneur, you need to understand and, more importantly, master cash management basics before mismanagement bites you in the ass or, worse, puts you out of business.
In its simplest form, proper cash management means controlling your inflows and outflows of cash, so you never run out!
Here, we outline seven fundamental concepts of cash management that every startup founder must adhere to to minimize cash-flow crises or an all-out business implosion.
The Gap Stage: Between Market Fit and Scaling or The Blood, Sweat & Tears of Selling Your Ass Off to Get to Sustainable Growth
The Gap Stage
The first significant group of customers you sell your product or service to is special. They set you on your way to sustainable growth. I’m not talking about signing up an early adopter or two. I am talking about that first sizable group that you work your ass off trying to and then selling. They become your company’s foundation for growth. They create the forward momentum needed to move your business to the next level. As an entrepreneur, signing up your first 50 customers who pay $2000 per year or the 20 that pay $20,000 is a distinctive stage in the evolution of a startup. I label it the Gap Stage. It’s the stage after you determining market fit, but before you press the gas pedal down in order to scale the business. It’s the messy stage. It’s a hard but transformative stage. It is here that you birth your business.