Tuesday, January 11, 2005

BizWizDumb Rules Part I

Over time there have been a few discoveries of business rules that apply to all. Some have been given, some found and some were moments of orgasmic genius that came from me but I cannot take the credit for. All that I am came from a merciful God, my family and all those who gave to me freely of their wisdom for better or worse. Thus far in my thirty (30) years of working I have noted almost thirty (30) rules. A few today will be a start:

Rule #1 Any company that puts a primary focus on managing cash flow will manage it to zero.

Don't misunderstand this as cash is to business as air is to life. Cash is air. Without it business dies, but an obsession with managing cash will take eyes off the ball of generating cash. This is a regular problem with companies that are having problems. When things are getting bad someone decides that the senior management has to focus on cash and then the end is inevitable. It will manage to zero as cost cutting, collections and cash management replace sales, customer service and quality products. Having worked for a federal bankruptcy court trustee proved this to me in spades, having also worked for several companies that did not survive and several turn-arounds that did balance is the key and it is so easy to get overly focused on cash.

Rule #2 The one item of greatest value in your business.... (and this applies to ALL) is your customer's order.

There are many valuable items in a business, its people, its assets, its knowledge but as pride can cause a great person to fall it can also cause a great business to fall. The Company is only as good or as valuable as its orders or queue of orders (which I pray you all have is a large queue). Let this soak in for a bit, ruminate on it and then take a look at what it takes for a customer to do business with the company. Make it easy for the customers to place orders, to get orders, to want to order.... Regardless of how much capital, how many people, how much equipment or how much cash a business has, if it has no orders for its products or services all the rest will return to dust. Nothing or no-one is more important than the customer's order, period.



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