Creating a cash flow pipeline

“Everything was so new – the whole idea of going into space was new and daring. There were no textbooks, so we had to write them.”

Katherine Johnson

A Parable: Creating a Stream

Adapted from an audio segment by
Robert Kiyosaki, best-selling author of “Rich Dad, Poor Dad”

A Spring Runs Dry

The story is told of a spring that ran dry in a small mountain village. The leaders gathered to determine how they would supply the village with clean water. There was another spring and reservoir about a mile away but was too far for the villagers to travel.

A business was created to solve the problem by carrying water into the village each morning for a set fee. Because the need for water was clear, the leaders agreed to the offer and determined a fair price for each bucket of water delivered.

Early the next morning the “bucket carrier” started and began transporting water. It was hard work, but with immediate sales for effort. Each day water was hurriedly carried. The more water that was delivered, the higher the sales.

As time went on, the business began to innovate. To save replacement costs and increase sales. Buckets were designed that could hold more water and were easier to transport. A quicker route between the reservoir and the village was found.

The problem was, despite all improvements, the bucket carrier still had to go to the spring each day to carry water.

A Better Solution?

Sometime later, another villager came forward with an offer to supply water. Because the village was growing and the continous noise from the transport begain to annoy the villagers. He planned to build a pipeline from the reservoir to the village.

The leaders were sceptical but eventually agreed to the competing plan. Especially since the new proposal would cost the villagers less for the same amount of water.

So, while the bucket carrier continued, pipeline work commenced.

The digging was tedious through the treacherous mountain terrain. The necessary tools and materials proved costly, and the task took many months.

Finally, the “pipeline builder” installed the last piece of pipe and ceremoniously opened the valve while a crowd gathered. Everyone cheered as they watched clean water flow into the village cistern.

How Things Changed!

The following day the two businesses worlds changed dramatically.

The bucket carrier had to lower prices significantly to remain competitive. The model was unsustainable.

The pipeline builder, however, began enjoying the investment. The long days of work were complete and the pipeline generated income with minimal maintenance.

Years Later

Many years later, after both business owners had died, the pipeline was still an integral part of village life.

Observations…

 Bucket Carrier  Pipeline Builder
DescriptionSystem addressed one part of the issueOwns a system
Income TypeLinear IncomeOngoing Income
EffortContinuous equipment upgrades and innovationContinuous maintenance
ImplicationsTime PovertyTime Freedom
RewardImmediate gratification (Sales per delivery)Delayed Gratification (Return on capital investment)
ExamplesAny one point of pain solutionAuthor, Inventor, Artist, Owner, Entrepreneur, SME etc

Consider maintaining your pipeline…

It doesn’t matter how efficient you are at “carrying water” Nor does it matter the size of your workforce or volume of apps, or accounting packages. Multiple connection points create a moving parts risk to keep your business reporting operating efficiently and effectively.

Can you afford your income reporting to be disconnected? Contact us now, to connect the dots.