The Startup Business - Dr Ross McKenzie

How Understanding Your Cash Flow Is Key To Building A Global Brand

An iconic Australian brand is R.M.Williams.

If you do not know about them, perhaps you have seen at least, many Australians travelling the world with those elastic sided leather boots.

From back packers to Prime Ministers, the R.M.Williams brand has been on anything from boots, hats, belts and clothes.

In fact, it is typical for visiting heads of state to Australia, to receive a small gift that may include R.M.Williams boots, belts or hats.

It is also on the record that the 42nd President of the United States, Bill Clinton, was inaugurated in a pair of R.M.Williams boots in 1993!

But how R.M.Williams came about is a fascinating story and is one of many chapters but ultimately captured the emotional psyche of a whole country.

Just imagine if your brand could do that!

The R.M.Williams story starts in 1932 by it’s founder, Reginald Murray Williams, or “RM” as he called himself.

Now you can read about him and the company from other sources, but there is one point I want to draw your attention to.

You see RM was an entrepreneur.

His business was a startup.

Maybe not the high tech versions that we talk about today, but ultimately he had a vision and through hard work and determination he pursued that successfully.

By all accounts, he was not always the easiest man to get on with. But then again they say that about the great Steve Jobs as well.

Now RM lived during a time of the great cattle barons in Australia.

Places like Anna Creek Station which according to Wikipedia, remains as the world’s largest working cattle station.

Its area is roughly 6,000,000 acres (24,000 km2; 9,400 sq mi) which is slightly larger than Israel. It is also seven times the size of the United States’ biggest ranch, King Ranch in Texas, which is 825,000 acres (3,340 km2; 1,289 sq mi).

I had to add that for my friends in Texas by the way.

This was RM’s world because RM started life as a bootmaker and saddler.

His business model if you could call it that, was mail order – cash first.

This enabled him then to purchase the material required to make the customer’s products.

Talk about cash flow positive!

Now much has been written about the ups and downs of his company of which he finally sold to his friend Ken Cowley in 1993 and has since changed hands.

However how RM started his business should be taught in business schools today.

For me one of the biggest reasons why budding entrepreneurs struggle in their startups and businesses is cash flow.

Often however it is not necessarily the lack of cash either.

It is how they are structured, or worse, their own financial comprehension of their true financial position.

You see it is too easy to get credit these days and as a result, true cash flow becomes difficult to recognise.

RM clearly understood this principle and as a result his legacy continues today.

If you ensure your business model is kept relatively simple when starting off and understand your cash flow, then perhaps your business one day will be like RM’s!

As to RM, well one can only say he lived an incredibly full life.

In 2003 he passed away at the age of 95.

However, his legacy amongst many things is an iconic Australian brand that is recognised around the world.

What will your legacy be?