(This presentation can be viewed in our “Flipbook” feature by clicking on the cover image).
TOP 12 LESSONS ON WHAT NOT TO DO IN MANAGING YOUR COMPANY
By:
Alex D. Moglia, President
Moglia Advisors
1) Don’t assume that what made your company successful, will keep it successful going forward.
- Question everything!
- Encourage new and divergent ideas.
- Catchy, trendy words, acronyms and phrases often confuse rather than inform your employees, and those with whom you do business.
- Business can’t be static; evolve or die.
2) Don’t set “aspirational” objectives that are based on hope, instead of realistic cashflow forecasts.
- Cash flow forecasting is not complicated, and should be utilized by all managers, whether they have finance or accounting backgrounds or not.
- Everyone in the organization needs to buy-in to the process and be held accountable to the actual results.
- Some of our new clients tell us they can’t create cash flow forecasts because they “can’t predict” what is going to happen. We eventually convince them to estimate future receipts and disbursements based on past activities and results.
3) Don’t assume that your larger competitors will not move down to your tier of the market, or that your smaller competitors will not move up to your tier.
- What are your competitors doing, correctly and incorrectly, and what lessons can you apply to maximize profitability and cash reserves?
- Work towards thriving instead of surviving.
4) Don’t assume that your employees understand and agree with the company’s short and long term plans.
- Engage their feedback on goals and utilize their suggestions on how to achieve them.
- Keep everyone in the entire organization informed, not solely about their group’s performance, but also about the overall company’s performance.
5) Don’t assume that you know your company’s strengths, and weaknesses, and that you can adapt timely to market changes.
- Be honest and vigilant in assessing both your financial and operational stability.
- Avoid complacency and waiting too long to acknowledge that major changes need to be made.
6) Don’t send “commandments” from on high without holding ownership, management and employees accountable.
- Change starts from the top and should trickle down.
- Create a simple and manageable approach.
7) Don’t spend money on “transformational” initiatives without having twice the amount of time and money than originally budgeted.
- Determine if initiatives truly improve the company’s position. Moves the dial in the right direction vs. just a cosmetic or band-aid fix.
8) Don’t follow pricing strategies that are “races to the bottom” of the market while “betting the company”.
- The “bottom line” is more important than the “top line.”
9) Don’t use money set aside for paying sales or payroll taxes as emergency cash.
- Otherwise, you are incurring personal liability.
- Prioritize paying your taxes on time.
- In serious cases, people go to jail.
10) Don’t assume that mismanagement and fraud happens to other companies, and not yours.
- Review your company’s procedures to identify past or current internal or external fraud.
- Constantly mitigate (reduce) risks.
11) If all else fails, don’t assume that your company can use bankruptcy to get “breathing room”.
- Bankruptcy is time consuming, complicated, expensive and sometimes unsuccessful.
- Bankruptcy is not an escape hatch or cure all.
- It should be the absolute last resort.
12) Don’t bring outside advisors in if you are not willing to follow their well-reasoned advice.
- Listen sincerely and be courageous in making the often difficult, yet needed changes.
- Companies who employ relatives of the owner(s) often find it harder to make changes.