Blue Sky Line Item

Sometimes strange things stick with you.

I was considering investing in a business a few years ago. I was looking at their forecasts and came across a strange line that appeared in the company's cash flow predictions.

"Unknown Business Relationships"

I did not make an investment in this business but that line item still resonates with me today. I asked the CEO about it when we were talking. I intuited what he meant, but, I wanted to make sure that I was correct.

"It is an attempt to quantify business deals that do not exist today."

I got it and it made perfect sense. Being a start-up he would not know what deals he would make in the next three years, but he would certainly would based upon the fact he has done some the last six months.

Every time I look at my own financial I mentally bake in this blue sky. Being in business longer means more opportunity and more opportunity is definitely a lever of success.

Cheers,
Mike