I have a good friend who has run a lot of businesses.
He’s probably one of the smartest people I know. He’s interesting for a lot of reasons, but mainly because he gives excellent business advice.
Not because he’s good at business, but because he’s failed at almost everything.
I have never met anyone who has started, run, and failed so many businesses.
Every time we speak, he has another story about something that’s gone wrong. It would make a great sitcom. And the contrast makes it even better: he always looks like a CEO. If you didn’t know him, you’d assume he was rich.
The Same Failure, Repeated
What makes him genuinely fascinating is that, regardless of the business, about 90% of them have failed for the same reason.
It’s not the idea, It’s not the market, It’s not even the execution.
If anything, he produces excellent work. He’s obsessive about quality, unyielding on service, and his rapport with customers is outstanding.
The problem is cash flow.
Specifically, what happens to money after it comes into the business.
No Buffer, No Business
As soon as cash hits the account, it goes straight back out again.
There’s no buffer. No safety net. No money sitting there to carry the business when things inevitably go quiet.
That’s how businesses die, not dramatically, but slowly, during the gaps between busy periods.
And those gaps always come.
The Cost of Looking Successful
So where does the money go?
Cars. Phones. Clothes. Lifestyle. The need to project success is the one thing preventing actual success.
It’s a simple issue, which makes it worse. In every other respect, he’s excellent at business. But that one lack of fiscal restraint has driven more businesses into the ground than most people would believe.
The Instagram Version of Success
This is the bit people should pay attention to.
Looking rich and running lots of businesses is not a precursor to success. It’s the Instagram version of success: impressive on the surface, empty underneath.
Real success is boring. It’s leaving money in the business. It’s resisting the urge to upgrade everything the moment cash appears. It’s accepting that a business needs a buffer to survive the dull, quiet, unglamorous parts.
With a small amount of fiscal restraint, my friend would be a wealthy man. Not because he needs better ideas or better execution, but because he needs to stop spending money that the business hasn’t truly earned yet.“Cash is king” isn’t a new idea. It’s as old as commerce itself.
But it’s ignored constantly.
And ignoring it is how otherwise good businesses fail.
