James Law’s - Etesian Group
Contact James Law on 0409 199 547
I can also be found on Twitter and Linkedin
Location – Perth Western Australia
Client base includes Western
Australia , South Australia and Northern Territory
“gōng kuī yī kuì” - “ to
spoil the ship for a
ha'penny worth
of tar ...”
If someone spoils the ship for a halfpenny of
tar, they spoil something completely by trying to make a small economy. This is
a British idiom. Tar was used to calk ships in the days of wooden ships.
Therefore if the shipwright or ships owner didn’t use the right amount of tar,
basically they risked sinking the ship. This is therefore a very apt idiom
because it refers to the oft times disastrous outcomes that result from
inappropriate financial savings.
The adjoining Chinese phrase is an equivalent
and translates as - “To ruin the enterprise for the sake of one basketful”.
If you’re like most small – medium business
owners, you don’t have enough hours in the day to manage the existing business
and grow it as well. The typical day is consumed by unforeseen fires demanding
your attention. Running to client meetings whilst chasing staff to ensure other
urgent matters (and sales) are attended to. All the while the immediate and
long term financial health and strategy of your business takes a back seat. The
consequences of this are seen in companies with cash flow issues, lack of
profitability, lack of access to capital to grow the business and much more.
These issues are amplified during hard economic times as we’ve all seen
recently. Matters then further compound themselves because managers try and
save money inappropriately and rather than recognizing the problem, getting organized and seeking the appropriate advice
and strategies, ostrich like management buries its head in the sand and tries
to get through.
Warren Buffet famously
said….”Accounting is the language of business”
Downturns can be a good. Many businesses
succeed and prosper during hard times. If you are organized and understand your
business fundamentals counter cyclical strategies can work very well. The way
to do it is to have a long term financial strategy in place, capable financial
advisers, strong cash flow control, and a good understanding of your businesses
financial fundamentals. These and other strategies and controls are the basis
for success. The catch of course is that most businesses do not have the in
house ability to execute the necessary disciplines.
How can your business secure its financial
health without crippling itself with additional costs?
Hire an outsourced, part time CFO! Knowledge is
power. Greater knowledge is greater power. Your task as the business manager is
to maximise profit. You cannot possibly achieve this without the appropriate
information on which to base informed decisions. Furthermore most of us benefit
from an experienced partner with whom we can discuss the issues affecting our
business.
For most businesses the “tar” which if applied
too frugally can (and often does) sink the proverbial ship is (the right
business) advice.
In the next blog we will look at what advice
you may consider.
Don’t wait until it’s too late, call me now for
a free business health check, 0409 199 547.
“Don’t agonize. Organise.” - Florence
Kennedy, 20th century American activist.
Cheers
James Law
0409 199
547
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