In hindsight, entrepreneurs should hold their accountants and/or CPA’s responsible for poor business advice….

I have often become involved with a small business owner who literally pulls all the money out of his/her company every year end.  The company becomes undercapitalized and if billings slow down or clients slow pay, the company either borrows money from the bank or slow pays their vendors.  Often the financial statements reflect favorable earnings, year after year…but there is no money.

And, I hear, over and over again:  “my cpa told me to pull all the money out so that I wouldn’t have to pay  any taxes.”  I then ask:  “where is the money?” and the answer is “oh, I spent it.”

I agree that reducing one’s tax liability is a prudent business practice, but, at the same time “cash flow” is the single most critical element in a business’s ability to survive.  Many of you know that (already).

Why not “pull the money out” and loan it back to the company?

They may have sung “Nearer My God to Thee” when the Titanic was sinking but I hummed it when I left a client’s office at midnight and had to walk through an unlit three-story parking lot to get to my car and kept hearing “sounds”…

I was working with an ad agency, Larkin, Meeder & Schweidel, a spin off from GSD&M, in the late ’80’s and one night I left their office around midnight.  I walked over to a dilapidated parking lot where I had parked on the top floor (three stories).  What I had not thought of that morning (didn’t even realize) was there were no lights and no elevator to get to the third floor.  I started walking up the stairs until I heard sounds and saw lights that comes from lit cigarettes; and, then…coughing.  I backed up and walked up the car ramps to the third floor, giving myself room to run, if I needed to.  Yes, that song came to mind; and I did not realize how terrified I was until I got to my car.  I then said to myself:  “dumb…I should have taken a taxi!”

I had a new client who was very unhappy with his #2 person and wanted to terminate him.  I encouraged him to meet with me and Terry, an HR consultant I knew.  We met two days later at 8:00 (at night) and half way through the meeting, she quit asking questions and closed her notebook.  Here I was, “into it”, still asking a bunch of questions and taking notes.  She finally turned to me and said, “Tom, we have a lot to think about, why don’t we let your client go home…I’m sure he’s tired”.

As we walked down the hall, I said, “Terry…why did you close your notebook half way through the meeting?”  She laughed and said, “well, you didn’t see what I wrote in my notebook, did you?  Would you like to see?”  I said “of course” and she showed me a sheet of paper that had only two words on it and a bunch of circles. The two words were “Yes….but.”

“Tom…he’s not going to do anything.  I’ve learned a long time ago to read “yes….but” and I then know that they are ambivalent, have dissonance and will not make a decision.  They will stay frustrated and they will just keep going until something external happens that forces a decision.”

I learned from that experience.  Once having been retained by a group in Michigan, I felt the strong sense of “yes…but” and called my new client and talked to him about my intuitive feelings related to the “yes…but.”  He got quiet and then admitted that he was so “conflicted” that working together might not lead to any meaningful change in the way he managed his business.”

Ten years later, the Michigan group was “still stuck” and twenty years later, the original story ended unhappily.  The #2 person eventually left and took my client’s business with him.

As a business person making decisions, work through the “yes…but’s” and make a decision!

Maybe I can help.

“

I pride myself in being a confidante to small business owners, commonly thought of as “entrepreneurs,” some are thought of as dysfunctional!

The intent of my blogs will be to share insight, stories and my real frustrations with dealing with the problems that my clients face, and I face, on an everyday basis.  My clients generally have limited staff and most often limited capital and they struggle to succeed.  I always encourage them to think in terms of reaching the next level (that is why I used climbing a mountain as the theme to my Website).

I encourage them to re-invent themselves, to build a strong middle management staff and drill down to gain more business from their current clients as well as coach them on how to compete for business.  It is very hard to do.

Whenever I become involved with a new client and his/her managment staff, I search for an inner spirit that resonates from their managment style and how they conduct business.  I am sensitive to what I perceive to be the spirit of their company.  What is the underlying philosophy of the owner or the managment group?  Are they even aware of having a spirit?  Day-to-day, are they mindful of a business spirit that emanates a sense of purpose or good business logic?

When my mother passed away, I discovered a little green book (written in the 1920″s), about  3″  x  4″      (which I have now lost).  In the book is one of my favorite parables, a snippet titled “Dark Water”: 

“An older lady walked up to a steamboat captain on the Mississippi river and said,                                “Captain…I just marvel at how you miss all those sand bars…I just don’t know how you do it.”                       The Captain simply replied:  “Ma’am…it’s not that hard…..I just look for dark water.”

What spirit underlies your business practices?  Are you staying in the dark water?