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Friday, May 15, 2009

Business balance: Learning the lessons

Recent experiences have taught me some important new (but fundamental) business lessons.

In the past two months, with the advice of a knowledgeable and highly experienced consultant who hasn't charged us for his time or services, we've learned much about the basics of financial reporting, accountability, and the separation of personal and business interests.

Most of this stuff is common sense, in hindsight, but frankly it took a good few "whaps" and a decent-sized business crisis to drill some of the basics into my thick skull.

But there is an irony here. If our most recent consultant hadn't been countervailed both in presence and experience by our primary business consultants, Bill Caswell and Upkar Bkihu of Caswell Corporate Coaching, the business, I think would have spiralled out of control into self-destruction, mistrust and hostility.

The reason: the new consultant, while highly skilled in pulling together the business financial requirements (and meaning well 100 per cent), managed, in a few weeks, to break many of the rules we had learned from Caswell and Bikhu about respect and mutual understanding.

Our new consultant considers this stuff to be airy-fairy, touchy freely and meaningless puff, at least in the context of a business in financial stress, and he has plenty of "war stories" of businesses which may have been superficially fun places to work but, without the necessary financial and management discipline, would face ultimate destruction at the hands of black-suited bankers and bankruptcy trustees.

(Caswell and Bikhu, conversely, certainly agree that financial projectons, cash flow management and business discipline are vital for success but you need to temper these qualities with human respect and interaction. The challenge is: When do you need to get tough on under performers?)

But there is a third element to this balance: The essential purpose and reason for the business itself. You may have the most wonderful and respectful business culture, where employees feel wanted and accepted and as full partners and participants. And you may have the best financial discipline, accounting, record keeping and rule book around. But neither of these mean much if no one is buying your product or service. In other words, without clients willing to pay you enough to earn you a profit, you are gone.

Marketing, of course, is one piece of the puzzle of attracting and retaining profitable clients for your architectural, engineering or construction business. You must have something they need and desire, and you need to let them know you are around and are available to provide the service.

And, of course, you need your current clients to be happy enough to return for more, buy new stuff (or services) and speak well about your business to their friends and colleagues.

But you won't be in business long, even if your product and service are in high demand and clients love you, if you lack the financial discipline to ensure profitability, and you lack the culture of respect and recognition of clients and employees alike.

You need balance to succeed in business. Keep everything in perspective.

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