Lately, I came across a business owner, very passionate in his business, very strong belief in his business model, having invested huge amount of time and money into it, but now he had to liquidate the business and perhaps he is starting all over again, all because he trusted too much in his CEO and CFO, hired the wrong management team, no proper Corporate Governance in place, no proper Business Planning and Rolling Forecasting, no proper Cash and Cost Controls, never Read the Financial Statements properly which actually hinted a Tidal Storm was coming his way, and the list goes on…
In business, never Trust people too much. As Business Owners, if we are not keeping close to our business, who else in the company will?
Trust is earned, not demanded.
This business owner narrated to me how his CFO asked to be left alone as he was “certified”, but this person has failed him badly, colluded with the Sales Director and recorded Revenue improperly, never managed company’s Cash flow properly, the company ended up incurring huge amount of liabilities, including unpaid staff payroll, with huge amount of revenue with No certainty of collection!
Company Party was hosted to celebrate the “Good” Revenue “achieved”, and good staff “bonuses” were declared and paid out, but the expected Cash Inflow never came in.
The CEO, CFO and Sales Director have since been fired, and this business owner has since taken over the running of the company himself, only to find himself picking up the pieces now…
He went around everyday looking for Angel Investors, finally found One. This Investor saw the huge inherent business opportunity in it, but wanted “super majority stake” of 70%, and has depressed the valuation of the company, plus some “very disadvantaged terms” accompanying the “acquisition”. I have helped this business owner “structure the negotiations”, but this business owner had no choice but to agree to the terms of acquisition.
Over the weekend, I received a text that the “investor” pulls out due to whatever reason.
The company is now going into liquidation. He texted me he is “heart broken”.
However, he wants to start all over again soon. As he has learnt this very valuable lesson of business management, he now knows how to “start again”.
Managing a business is an Art, not a Science. No Theory can help, it’s all about “Learning on the Move” from own mistakes, going through Trial and Errors, but more important, tap on the Learning and Knowledge from those who have been through it, failed many times, cut short your own Learning in the whole journey.
Hopefully you can find your own route to business success. Be humble, learn from others. Invest in Learning. No short cut. Do Not Trust anyone. Implement proper Governance, Plan and then Cascade down KPIs, stay close to your business and the Numbers. Cash is King, never lose sight of it – Just like the Pilot watches his Fuel Tank very carefully while maintaining contacts with various Control Towers (aka his “Advisors”) throughout the flight.
Good luck!
If you need help, feel free to contact us at :
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www.corporatebackoffice.com.sg
