"How Do You Start Cash-Flowing ASAP When You're Starting Out?"

0:00to expect cash flow from day zero. Really good question. It depends majorly on the business. And so this is actually one of the really important things in terms of business opportunity selection. And so like if you're getting into a business, let's say it's construction, um you're going to be in a cash constrained business. If you're getting into e-commerce where you have to buy inventory constantly and if you're growing quickly, all the profit that you're making you have to go to buy even more inventory so you can grow. Uh that's going to be a cash constrained business. Um if you have uh software, typically also a cash constrained business, especially in the early days cuz it costs a lot of money to start. You have no product and you just have to front costs so money goes out, no money coming in uh to get developers to you know build you a thing that you can then ultimately start selling.

0:38Um all of those situations are low cash flow. I would say the highest cash flow situations are uh each of those businesses I just described when they're at scale can produce more cash flow. Um but a service business is the easiest to start that day one can produce cash flow cuz especially if it's just you starting out, your cost is your food and your rent basically. Uh and then everything on top of that is basically profit if you're the one doing the work. And so the highest cash flow business you can do in the beginning is going to be you selling your time for money.

1:07All right. Uh Yeah, this is really interesting. This was top of mind for me. Um no one is doing as well as you think they are. But you are not doing as well as they think you are, which means that you're doing better than you think you are, but not as good as everyone else thinks you are. Which also means that if you're somebody who's status driven, your status in other people's eyes is actually slightly above what you think it is if you're doing anything uh remotely good. And so um it's just a very interesting paradigm that I've been thinking about a lot because um if you try to live your life through other people's eyes, it actually is more rose colored because everybody else's lives are more rose colored through your own eyes.

1:51Weird. Um Okay. Sullivan Pratt's. All right. Or Soy Ivan Pratts. Ah, that's Espanol. Ah, claro. Okay. How do you start cash flowing ASAP when you're starting out? Let's say cold emails your lead getting method of choice and you sell agency services. Well, dude, if it's just you, the moment you sell, you're cash flowing. So, like you just need to collect money. Like that is literally the Like if you have no other costs, you getting a stranger to give you money in exchange for stuff you do for them is the business. And the moment they give you the money, you now have cash flow. Um This is not something to overcomplicate.

2:30I think it The question a lot of times comes down to a fancy word, which is ROIC, which is return on invested capital, which basically means when I put money into the business, what's my return on that money? And so, the person who needs to know the most about the return for every single dollar you spend in the business is you, right? The people who move the fastest in business are the best allocators of resources. It's not the people who actually move the fastest. Like you don't need to be a erratic some like Energizer Bunny that's on, you know, cocaine. Like you just need to make good decisions where you put money and so that you get more money back out.

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