This article originally appeared in the March/April issue of Startups Magazine. Click here to subscribe

And yet, the terrain is tougher than ever, and the journey for entrepreneurs across the board is as perilous as ever with data showing that 90% of startups go on to fail within the first 5 years.

Now, that’s entrepreneurs in general, so then compound upon that landscape the fact that so little funding is actually given to female-led businesses in the first place, AND so few female-led businesses ever reach the mythical six-figures in revenue in a single year, let alone seven-figures and beyond … in a recession, following a global pandemic – it can also seem like there’s never been a worse time to start a business as a woman.

But that isn’t true … because rough seas do truly make the best sailors and having seen the roughest of seas in the last few years, women are creating robust and sustainable businesses by taking the most simple but profound of approaches to their businesses.

The elephant in the room

For years the statistics for startups have always been bleak and yet, if we are to ensure that we do not follow the overwhelming trend of involuntary closure within those 60-months, it’s important to do some research to understand what actually causes businesses to close in order to ensure that we can keep many more of them open.

According to CB Insights’ 2021 report, the number one reason for startups going out of business was that they ran out of cash (at 38%) – but every other reason they list in their research comes back to the exact same position, a lack of market need, having the wrong team, getting out-competed or a flawed business model still results in the same position for the business … Running out of cash, and therefore ultimately going out of business.

Businesses go out of business because they run out of cash.

It’s an inescapable truism, and yet it feels like a huge elephant in the room.

Cash is the PRIMARY focus when a business is going out of business – it’s the owners pre-occupation, and becomes the desperate focus in those final months as they seek to keep the business alive.

It’s at that point that those truisms become even more obvious – that cash is the air of your business.

A business can survive without many things that we’re often taught to be essential – and yet it cannot survive without cash. But there is NO joy in being forced to focus on cash for survival.

And so those seeking to create a sustainable business that will work for them, not just the other way around, do so by adopting a ‘Cashflow Approach’ to their business – willingly choosing to focus on cash not only to survive but to thrive.

First principles

A cashflow approach to business takes a first principles approach to the concept of cash and focuses on its presence and flow into (primarily), and out of (for management purposes) the business.

This means considering the lens with which you assess your business activities and adopting focus of ensuring cash is being created, collected and managed in your business.

‘The Business Hierarchy of Needs’ developed by Mike Michalowicz, (similar to that of Maslow’s) explains how a business should determine priority for focus based on its stage of development.

His premise outlines that at the foundations of a successful business wishing to create sustainable success, is the requirement for the creation of CASH. He also proffers that until that outcome in the business is secured and achieved within the business, it will always have a drag effect on the business’ ability to grow and scale (because you will keep meeting the ‘obstacle’ of not having the cash required to do the next thing you wish to do).

The hierarchy provides a clear roadmap and a powerful new mission for businesses wishing to start, scale and thrive.

A new mission

The mission was clear. Consistent Cashflow became the primary objective.

And it is a focus that I have been grateful for and have supported others to do the same.

And yet, also understand that it’s not an easy focus for women to take in a world where society makes it challenging for EVERYONE to talk about money, and women face a far higher social penalty for financial risks, and perceived mistakes; where girls are discouraged from studying maths and engaging in finance, and more women than care to admit it feel like they’re "bad with money" or are "not good with numbers."

But there are truly practical steps that every woman can take to adopt a Cash Focus.

Practical steps:

• 1. The first step to adopting a Cashflow Focus is really to get to grips with what cash is in a business and what it does (and doesn’t) mean – that powerful understanding will help you to be able to understand how it works and help you to bring more of it into your business.
• 2. Next stage is to really understand HOW it manifests, and that is in the activities that we choose to spend our time on. Understanding what does and doesn’t move the needle when it comes to cash is critical – and commit to understanding what those cashflow critical activities (CCAs) are in your business, and how to ensure you are doing them with the right intensity and effectiveness is key.
• 3. Step three is to then recognise how we go about changing our results, which is a function of our actions and behaviours, which in turn is driven by our mindset and beliefs about so many facets that impact our business including money, ourselves and what we believe to be true.
• 4. Having reviewed and uplevelled our mindsets and beliefs, and the skills with which we perform the actions that impact our cashflow results – understand the role of our habits to support the outputs we seek is really important, and a powerful opportunity to make lasting change.

The fact is that this is NOT an easy ask. Money remains a touchy subject in our society and entrepreneurship is not a bed of roses either. And yet, there is a real magic to be had in taking control of this part of your business. You set your business up for success in a way that you create something truly unstoppable. You focus on the air of your business and ensure that you have created a way for it to always have the life and vitality it needs, and you give it the opportunity to create the change, and the impact you wish to see in the world – just as you intended, without cash needing to get in the way.

Focus on the cash, so that you don’t need to focus on the cash … because it’s taken care of itself. It sounds a little simplistic – and yet is a powerful opportunity for those courageous enough to adopt this brave approach.