Eat Well or Sleep Well

Posted: July 27, 2010 in Business Help, Business Management, Cash Management, Entrepreneurship, Uncategorized

Let’s face it, the last several years of “plenty” have made lots of us very fat. I am not talking about weight or inches around the midsection, but instead I am speaking in terms of gluttonous business waste. A close friend of mine told me once that entrepreneurs can either eat well, or sleep well, but seldom both. He was right then, and it is even more important now to remember this.

Eat Well

When  a business owner is “eating well” then consumption is the rule of the day. Real attention to expenses and excesses is rarely given and in times of plenty this attitude only results in less-than-possible results. The business does not do as well as it really could and essentially the business will do “good enough”. This is fine for the entrepreneur at the time. However the lost opportunity cost is hard to quantify. Excess does bring short-term comfort at a cost.

Sleep Well

When the business environment is in a difficult phase as we are currently experiencing or if the business is in a startup phase, capital protection is of paramount important. “Sleeping Well” refers to the concept of reduced anxiety over having enough cash to cover the monthly nut or to grow the business. Entrepreneurs who want to sleep well protect their cash at all costs.. including the cost of not “Eating Well”. Frugality brings comfort.

Riding Out the Storm

It may seem extreme, but the entrepreneur who is intent on surviving crises or even a growth spurt will have the keenest eye on all expenses, even the most mundane. Business owners and managers must continuously ask the question: “Is this expense absolutely necessary?” and of course: “How can I reduce the cost on this or that?” Cutting all non-essential expenses is a mandate, and while there may be less Filet Mignon and caviar for a while, the comforts of having enough cash to meet the needs of the business will outweigh the perceived costs of reduced creature comforts. A well-rigged and secure ship will ride out the storm.

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