Companies run into trouble from time to time. But why do some companies survive those troubles and others don’t? To me, there are two issues. First, it’s knowing when to ask for help. Second, it’s being willing to follow the advice that you’re given. But not everyone waits till they’re in trouble to ask for help. I remember getting a call from a business owner who said he was doing pretty well, he just wanted some help because he “didn’t know what he didn’t know.”
Sometimes I meet with companies that are in a different situation. They have waited so long for help, that drastic measures need to be taken to enable them to climb out of the hole that they’ve dug for themselves and their companies.
How do you know when you’ve waited too long, and when should you call for help? Usually, these situations present themselves when a company runs short of money. This doesn’t happen all of a sudden, it is mostly a slow path down the road.
I had been following up with a manufacturer for about 3 months, when he finally called me on a Tuesday and told me that we needed to start “tomorrow.” I arrived at his plant Wednesday morning, and he ushered me into his office, closing the door behind us. He gave me a strange smile, and said, “I’m so glad you’re here as my CFO. Your first job is to figure out how we’re going to get enough money to cover payroll on Friday.” And, he wasn’t kidding. It’s a longer story that I’m happy to share if you want to call me, but the short story is that we did it, but it wasn’t easy.
So, here are nine (9) warning signs that tell you that you need some help:
In actuality, the biggest problem that business owners have is looking at their business through rose colored glasses, knowing that they’ve been there before. One client was short on cash, so they started running their payroll out of AP instead of through their payroll service. It was a very bad sign. I talked to the retired father who still owned the business. He said, “Yes, I’ve done that a few times myself over the years, when we ran short. He’ll (his son) be OK.” Three months later, the company filed for bankruptcy.
The common thread is, “We’ve been here before, and we were able to work our way out of it ourselves.” But each situation is different. Deciding to not seek help might save you some pride and some money in the short term, but it could be very costly in the long run. You’re much better off seeking help and advice early in the game. As I’ve said over and over again: You can usually find a solution to the problem, but the longer you wait, the harder it is, the more expensive it is, and the longer it takes. Why not take the shortcut and start finding a solution today?
There is one thing that causes every business owner to grimace. You sent an invoice to ABC company, that they
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