The best way to protect your company is to remember that you are not your business. Your enterprise is a separate living entity with a life and needs of its own, many of which you may not totally understand right now. Your responsibility to this living entity is very similar to the role you would play as a parent of a young child. You are there to guide and nurture it—not impose your needs, beliefs, demands and moods into its fragile world. To keep your company healthy it is vitally important to keep an arm’s length between you and your customers, employees, vendors and lenders.
For instance, has a vendor salesperson ever come and asked you for a favor; to order additional product to help him or her make a sales goal or contest? It is a great idea if it benefits your business and cash flow is not an issue, however it is a really bad idea if it doesn’t. In that moment, when this friend asked you, as the owner/buyer, for a favor it might have felt good to say “sure, why not.” This short-term feel-good moment is replaced by dread when the invoice arrives. It is then that we realize that the road to hell is often paved with good intentions.
Do you have employees that have been with you for years but seem to hurt your company more than help it? Do you have a client that is always running over 90 days late in their payments but you let them slide for one reason or another? How about a vendor that has outlived their usefulness or a bank that tacks on charges a little at a time but going down and fighting them seems like too much work?
You can come up with valid reasons for any of these situations, but what about your business? How does that additional product that you don’t need in this moment affect your purchase budget and your cash flow? How much better off would sales be if you got rid of the non-performing members of your team and replaced them with motivated professionals? Could you drop some precious points to your bottom line by negotiating or changing banks and suppliers? These decisions are a critical component of any businesses success. Unfortunately many entrepreneurs have turned complacent and have abdicated the critical responsibility to be the guardian of their company to someone other than themselves or they ignore it altogether.
How can we let that happen? The problem has a lot to do with a blurring of lines between the company and the founder. When an owner feels like they can make any decision they want, there is a lack of boundary between the personality of the entrepreneur and the needs of the enterprise. This can create a dangerous gap in continuity for the business, putting everything at risk. So what is the solution and how should one interact with their creation? The answer is BY PLAN. If you don’t have a purchase budget make one, if you do have a purchase budget, use it. If employees, lenders or vendors have outlived their usefulness then get them back on a positive track or remove them from the equation. Set up monthly, quarterly and yearly reviews of sales and marketing, operations, financials and employees that surround and affect your company. Then take a close look at yourself. Have you allowed your emotional, physical or financial needs to negatively impact the organization? If so, stop it.
Your business is not you! Always do what is best for its growth and well being even if these tough decisions hurt. Remember never kill the goose that lays the golden eggs!
