The Wrong Book
You’re reading the wrong book. The real story of your business isn’t told in revenue or profit. It’s told in the quiet cash flow statement.
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The Three Rivers That Feed (or Drain) Your Business
Imagine your business as a landscape fed by three rivers.
Each carries cash in and out, shaping your terrain. Sometimes they flood; sometimes they dry up.
But together, they tell the whole story of whether your business will thrive or thirst.
The Operating River: the steady current that feeds your daily life.
The Investing River: the upstream channel where you build new growth.
The Financing River: the occasional dam release that keeps you alive when the rain won’t come.
You can’t change the terrain until you understand how these three rivers flow, and whether they’re working with each other or against you.
The 3 Cash Stories (and What They’re Really Saying)
Operating Cash Flow: The Engine Room
This is the daily grind: where cash actually moves through your core business. It’s not about “profit”, it’s about whether you’re converting operations into oxygen (cash).
What to read:
Inflows: Customer payments, service fees, interest income.
Outflows: Payroll, supplier bills, rent, marketing, software that keeps the lights on (like CRMs, payroll tools)
Questions to ask:
💨 Where’s my cash getting stuck?
If customers take 60 days to pay but suppliers demand 15, you’re self-financing your buyers and draining your own tank.💳 Am I really generating cash when I make a sale?
High revenue + negative operating cash often means you’re selling on credit, not collecting.📦 Is my inventory blowing up?
If inventory’s rising faster than sales, cash is getting trapped on shelves.🕳️ Who’s financing my operations (me, my vendors, or my customers)?
If vendors demand payment upfront, they hold the power. Negotiate terms, every day gained is cash saved.
Healthy operating cash flow means your business funds itself. Negative flow means you’re running on borrowed breath.
Investing Cash Flow: The Growth Engine
This is where you plant seeds. It tracks money flowing in and out of long-term assets, new equipment, software, IP, and acquisitions.
What to read:
Outflows: Property, plant, and equipment purchases, technology upgrades, infrastructure, R&D, or strategic software that scales operations (think automation systems, data platforms, capacity builders)
Inflows: Selling assets or earning returns on investments.
Accountants call this capital expenditures (CAPEX), but for founders, think of it as planting trees: painful now, shade later.
Questions to ask:
🌱 Am I investing or just spending?
An iMac for your designer? Probably necessary. A shiny SaaS you forgot to cancel? That’s not investment, that’s leakage.🧩 Are my investments turning into productivity?
If your burn rises after a big “investment” but output doesn’t improve, you’re building vanity, not value.💡 Am I financing growth with profits or borrowed cash?
Healthy investing outflows come from operating inflows, not credit cards or loans.
Negative investing cash flow isn’t a red flag. It’s context. Are you building foundations or digging holes?
Financing Cash Flow: The Lifeline (or the Crutch)
This is your partnership with capital, the story of how you fund your ambition through investors, loans, or retained earnings. Here’s the truth most founders miss: Financing through debt or equity isn’t bad, it’s strategic.
Debt can be your throttle; equity can be your parachute. The key is knowing why you’re using them.
What to read:
Inflows: Equity raises, loans, and credit lines.
Outflows: Loan repayments, dividends, founder draws.
Questions to ask:
🪙 Am I raising to grow or to survive?
If your raise covers payroll instead of product, you’re borrowing oxygen, not fueling expansion.⚖️ What’s my capital mix?
Too much debt, and interest eats your future profits. Too much equity, and you’re giving away tomorrow.🧯 Am I using new funding to patch operational leaks?
If every funding round disappears into expenses, fix the engine before adding more fuel.
In healthy companies, financing cash fades as operating strength grows.
Learning to Read Your Own Rivers
Here’s the founder truth no spreadsheet will tell you:
Cash flow isn’t accounting. It’s awareness.
When you learn to read those three rivers, you stop reacting to your bank balance and start leading it.
Operating shows how you live.
Investing shows how you build.
Financing shows how you sustain.
Most founders chase revenue. The wise ones watch the flow.
So this week, do one thing:
Pull up your cash flow statement. Label the three sections “Daily,” “Growth,” and “Fuel.” Then, next to each, write one word:
Daily: Am I breathing or gasping?
Growth: Am I building or bloating?
Fuel: Am I choosing this, or relying on it?
You’ll see your business in a new light, not as chaos, but as current.
Community Note
Every founder’s rivers flow differently.
Some are still feeding from financing streams, others are just starting to see their operating flow turn green. Some are knee-deep in investing outflows, building muscle that hasn’t shown up on the scoreboard yet.
Wherever you are in the flow, you’re not behind. You’re just in a different bend of the river.
Reply and tell us which of your three rivers feels strongest right now. We’ll feature select reflections in the next NestLedger Playbook, the living library of founder cash wisdom we’re building together.
Let’s keep learning from each other, one flow at a time.
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