Sometimes a single phrase will pop into my head and illuminate a murky idea for me. This happened a few days ago. The phrase was “ancient rivers of money” and suddenly it helped me understand the idea of inertia as it applies to business in a deeper way. Inertia in business comes from predictable cash flows. That’s not a particularly original thought, but you get to new insights once you start thinking about the age of a cash flow.
We think of cash-flow as a very present-moment kind of idea. It is money going in and out right now. But actually, major cash flow patterns are the oldest part of any business. It is the very stability of the cash flow that allows a business to form around it. In fact, most cash flows are older than the businesses that grow around them. They emerge from older cash flows. When you buy a sandwich at Subway, the few dollars that change hands are part of a very ancient river of money indeed. Through countless small and large course changes, the same river of money that once allowed some ancient Egyptian to buy some bread from his neighbor now allows you to buy a sandwich.