The Entrepreneur's Mentor

Getting Moving When We Run Out of Gas

Sometimes leaders can be their own worst employees.  As hard as it can be to inspire our other employees, self-motivation can be even more difficult.

There are instances when leaders need to stop and take a look at their own actions. They may be on a treadmill and not even realize it. They may be spending an ordinate amount of time trying to complete busy work or solve small problems without getting anywhere.

This "phenomenon" may occur when things slow down, when no big issues or exciting tasks present themselves. The desire or ability to deal with the mundane isn't there, so nothing gets done.

It is important to be able to sense what is happening and put on the brakes. Leaders need to have a methodology to get the juices flowing again. It may be getting out of the office and going to see customers/clients and finding out what is on their minds or what new issues are arising in their businesses. It may be getting together with colleagues and brainstorming. It could be digging into one issue in depth.

Sometimes leaders, like everyone else, need to be held accountable by someone else. It may be hard to have a relationship like that with an employee, so it can be useful to have a coach or trusted advisor. Some continue to talk with mentors. Nobody is immune from the doldrums. Leaders need to know where to go to get help in shaking them off.

I know that I can go to certain colleagues to get pumped up. I know they will bug me until I get done what I have said I would do. I may momentarily resent their pushiness, but it does work, it does get me going.

Cash is King

Many businesses are struggling to stay alive in these uncertain times. The problem is that they don't really have a plan of attack. They are reactive rather than proactive. If you have been lucky enough to be in a strong position up until now, it doesn't mean that you are in the clear. You need to be looking at the data and "reading the tea leaves" on a regular basis.

You need to know what is going on with your customers, your suppliers, your geographic market and any national trends in analogous businesses. Most importantly, you need to be salting away cash that will be there if things slow down for you. Could you survive for six months with no business coming in?

The most optimistic analysts are saying that the economy will begin an upswing in the fall, 6 months from now. What will it take for you to survive for six months? Have you planned for a worst case scenario?

If you don't presently have the cash, how will you get it?  There are basically three places from which cash can be developed. The first is from working capital. You get this cash from your inventory (selling it) and your receivables (collecting them), operations, and, if necessary, the sale of assets.

Operations can provide cash if you can streamline them, cut down on expenses and on time and make your operation more efficient. This can be accomplished by downsizing, assuming you perform that operation with a strategy and a plan that acknowledges the relative value of each position as far as producing cash for the organization. It can be accomplished by shutting down product or service lines that have low margins or long term paybacks. Remember, cash is king.

You have to keep in mind that you need to have the cash to keep your business open. Nothing else is of more relevance in the short term.

In a small business the owner must think like the CEO in having a cash accumulation strategy; the CFO in actually managing the cash, doing the constantly revised budget and projections; the COO in scaling the operations; the VP of Sales in making decisions on which sales are profitable and which aren't and in coming up with a pricing strategy; and the head of HR in deciding about layoffs, furloughs, benefit cuts, deferring compensation, etc.

Big business or small, cash is king. In a crisis it does not matter that you are set up for long term sustainability. It doesn't matter if you have a brilliant marketing plan or a sales team full of "sales animals." All that matters is that you have the cash to get through the crisis.

If you manage your cash strategically and maintain your values and act consistently with them, you will end up in a stronger position that your competitors and you will probably be in a stronger market position than you were before the recession.