No business owner or principal takes out a loan with the expectation of not paying it back… and no lender makes a loan with that belief. Sometimes, however, circumstances (self-inflicted or otherwise) take over. Today’s newsletter looks at what to do if you are in danger of default. Read more…

Despite best efforts to communicate direction and hire well, many organizations struggle to achieve their goals. Often, the problem is one of internal bureaucracy, which prevents employees from completing tasks effectively. An "enabled organization" empowers individuals by ensuring they clearly understand their objectives, have the time and resources to achieve them, and the authority to make decisions. This month, I explain the five necessary characteristics of an empowered organization. Read more…

My clients arrive in financial trouble — they hire me to get them out of it. But the best way to fix financial problems is to never get into trouble in the first place. The key is to pay attention to and execute on several important financial things. Today's newsletter explains. Read more…

My clients arrive in financial trouble — they hire me to get them out of it. But the best way to fix financial problems is to never get into trouble in the first place. The key is to pay attention to and execute on several important financial things. Today's newsletter explains. Read more…

A loan is both a contractual agreement and a relationship. Ensuring the health of that relationship requires ongoing and positive communication with the lender. Today’s newsletter takes a look at lender communications and offers suggestions on how to do it well. Read more…

Selling a distressed business is almost always better than liquidating. But it is not easy, nor is it the same as selling a business that is healthy and solvent. You’ll need experienced, capable professionals by your side and a bias towards moving quickly. In today's newsletter, I review the necessary steps for getting this done and share pointers for avoiding common pitfalls. Read more…

Often, business owners incorrectly assume their business is profitable because they rely solely on financial statements. While these are certainly important, a true picture of business profitability requires understanding economic profit as well. In today’s newsletter, we explain the distinction and look at why evaluating economic profit is critical in assessing true financial performance. Read more…

Every business runs on dollars — but there are limits to purely financial analysis. When tracking performance and working to maximize the output of critical measures, it is important to look beyond just financial indicators and consider other factors as well. In today’s newsletter, I share examples of additional, quantity-related measures that should be included in the overall mix. Read more…

Every well-run company relies on data to operate the business. But using the wrong data or looking at it in the wrong way can lead to faulty “insights.” This month, I take a look at how data should (and should not) be used by businesses when attempting to draw conclusions and make decisions. Read more…

When it is not possible to turn a financially troubled business around, selling is usually the best option. However, selling a distressed business is not the same as selling a healthy one. Today's newsletter explains why and offers suggestions — and cautions — if you find yourself in this position. Read more…

Choosing an appropriate bank for your business is a non-trivial, yet often overlooked decision. A good match is important, and changing lenders is never simple. In today's newsletter, I lay out the factors to consider and walk you through a typical winnowing process from start to finish. Read more…

In business, change isn’t just inevitable — it's essential for survival and growth. But making change happen in any organization can be difficult; it requires more than just a few tweaks at the edges, here and there. In today’s newsletter, I share my firsthand experiences with organizational change and offer insights into what really drives successful transformations. By applying these concepts to your own circumstances, you will greatly increase your likelihood of success. Read more…

When a business is in financial trouble, an understanding of its “liquidation value” is essential. Liquidation value is the value of the monetized components of the business, such as accounts receivables, equipment, etc., should the business not be sold as an ongoing concern. Who gets what is then a function of creditor claims on specific assets. This month, I explain why a thorough analysis of the various components and expert guidance regarding the "creditor waterfall" are essential pieces to this complicated puzzle. Read more…

Financial statements are intended to serve a purpose, whether that means sharing how a business is doing with outside entities or managing internally. There is no one-size-fits-all format. Today's newsletter looks at the most important factors to consider when determining which statements are appropriate for which users and situations. Read more…

Getting anything but the simplest of things done, as quickly as possible, requires first identifying the critical path and then finding ways to shorten it. If you want to get things done without delay, you will need to specify the critical path steps involved. Today's newsletter looks at ways to shorten — or, at the very least, avoid delays in — the critical path. Read more…

The Fixed Charge Coverage Ratio (FCCR) is a measure of how much cash flow there is to cover debt service payments. A lowering of this important ratio is a warning that your company’s financial situation has deteriorated. Today's newsletter looks at the FCCR and offers suggestions for keeping yours high. Read more…

Opportunity cost is an essential, but often misunderstood, business concept. In short, it is about determining the highest use and highest value of a given resource, whether that's time, money, production capacity, or something else. In today's newsletter we look at opportunity cost, its two most critical components, and offer suggestions for using it properly when evaluating alternative courses of action. Read more…

Businesses need processes. But what makes a process a good process and what factors need to be considered to optimize process within your organization? Today's newsletter takes a look and shares suggestions. Read more…

As former Secretary of State, George Schultz once said, "Trust is the Coin of the Realm." Nowhere is that more important than in running a business that remains successful over the long term. In today's newsletter, using the recent collapse of Silicon Valley Bank as an example, we take a look at what can happen — in any industry — when trust evaporates. Read more…

A good relationship with your lenders is important. You depend on them for liquidity and, in turn, they (rightfully) expect you to be forthright, timely, and capable in your communications regarding your financials. With that in mind, today's newsletter looks at some "Do's and Don'ts" when working with your lenders. Read more…

Making decisions based on what we think we know to be true can be dangerous — especially when what we "know" is either partially or wholly incorrect. Today's newsletter looks at the three causes of this problem — flawed data, flawed models, and flawed thinking — and offers suggestions for avoiding these common traps. Read more…

Clear roles and responsibilities — that is, everyone knows what everyone is supposed to do and get done — represent a critical component of any high-functioning organization. Today's newsletter explains why this is so and offers suggestions for implementing this in your business. Read more…

There is a great deal of variation in the services provided by accounting firms; one size does not fit all. However, the accounting firm you choose matters quite a bit, so it's important to select one that fits your particular circumstances and objectives. Today's newsletter reviews the essential factors to consider. Read more…

There is little doubt that a recession is on its way. The hard part, of course, is knowing when it will arrive. Regardless of the timing, there are things that every business should do now to prepare. Doing so will leave you in a stronger financial position when it occurs, and may even provide you with new opportunities. Today's newsletter highlights four key things worth doing to prepare. Read more…

Every business faces risk. Fortunately, some of these risks can be transferred, primarily through various types of insurance. Many other types of risk cannot, and so the business owner is stuck with them. In today's newsletter, in which I use business interruption as an example, I explain how to identify non–transferable risk and offer suggestions regarding what to do about it. Read more…

Well-run, routine processes are critical to business success. In today's newsletter I explain why such processes are important and share tips for ensuring that yours are doing all they can to maximize profits for your company. Read more…

Having to liquidate a business — for whatever reason — is rarely a happy event for its owners. However, if and when that day arrives, there are several things to keep in mind to ensure the best possible outcome. Today's newsletter considers the available options and offers tips for managing the process as painlessly and effectively as possible. Read more…

Every business needs to "make money." But the term itself can mean many different things, depending upon the measures used and the circumstances involved. In today's newsletter, we explain the concepts underlying this term and offer suggestions for making sure you are applying them accurately in the way you make decisions and measure your success. Read more…

Lender communication is an important (but often overlooked) aspect to any loan agreement. Long after the ink has dried on the closing documents, successful businesses work diligently to communicate effectively with their lender(s). Today’s newsletter explains how. Read more…

For today’s businesses, the many challenges of Covid, supply chains, labor shortages, general price inflation, and high energy costs increase risk. That means the risk of future liquidity constraints has increased as well. Today’s newsletter addresses how to size up that change. Read more…

I have written before about the importance of understanding the difference between idiosyncratic risk and systemic risk. In today’s newsletter, I expand these two types of risk to a lens that looks at business problems. Then I discuss how this lens interacts with the concept of price elasticity. Why? I show how this understanding can help your business face the challenges presented by Covid, supply chain disruptions, labor shortages, general price inflation, and more, particularly with respect to product pricing. Read more…

Inflation is here for the foreseeable future and compensation costs will continue to rise even faster — all on top of supply chain problems. How best can an organization understand product costs amid our new reality? Today's newsletter takes a closer look and offers tips for staying ahead of the inflation game. Read more…

Many businesses own the real estate they use. This presents a number of opportunities and considerations, especially those related to whether it is more advantageous for the business to own or sell/lease-back the real estate in question. Today's newsletter offers tips for making quality decisions in this area. Read more…

The future is fundamentally uncertain. Unforeseen surprises are all but inevitable. How then can we position our enterprise to quickly respond to these unknowns? In today's newsletter, I take a look at this fundamental uncertainty and share suggestions for taking it into account in the way you monitor and run your business. Read more…

Effective management requires listening, communicating, and observing people firsthand. Virtual interactions, while certainly more convenient, can have a negative impact on results if done to the exclusion of everything else. Today's newsletter explains, in addition to offering specific suggestions for taking full advantage of your physical presence. Read more…

The material and labor shortage are likely to stay with us for some time. Now, it is more essential than ever to keep close tabs on where your company is financially. With that in mind, today's newsletter examines several financial best practices that are critical to navigating through these challenges. Read more…

Financial restructuring generally refers to a series of financial transactions that results in existing equity being significantly diluted and/or wiped out. It is rarely a pleasant process and, thankfully, not something most debtors have a great deal of experience with. By understanding what's involved (the subject of today's newsletter) and enlisting the help of qualified and experienced financial and legal counsel, you can achieve the best possible outcome for yourself and your business. Read more…

The critical path can be defined as the sequence of tasks determining the minimum time needed to get something done. Identifying and understanding these tasks is essential to ensuring that the necessary work in your organization gets done properly and on time. Today's newsletter examines this important concept and shares tips for managing it effectively. Read more…

Fundamentally, leadership is about getting people to move in a particular direction. In my experience, that comes down to communicating a clear vision, ensuring that people understand their role, and staying visible throughout the process. In today's newsletter, I take a look at how this plays out in practice and share additional recommendations. Read more…

Opportunity cost is a big picture means of looking at things. It comes down to determining the highest use and highest value of a limited resource, whether that's time, money, production capacity, or something else. In today's newsletter, I examine four critical constraints that create opportunity cost in the first place and share suggestions for identifying and managing them. Read more…

When evaluating business decisions that have gone wrong, I often find that it is the data itself — not the conclusions that were derived from it — that was flawed. In today's newsletter, I share examples of how bad data has led to bad decisions, and offer suggestions for ensuring that the data you rely on is well conceived. Read more…

Every business has its share of ups and downs. When the downs create financial distress or threaten your business with a loan default, lender communication will necessarily come into play. In today's newsletter, we lay out an approach for doing this effectively. Read more…

Selling any type of business is complicated. When the business is distressed, there are additional considerations and potential pitfalls that you'll want to be aware of. In today's newsletter, I highlight these differences and share tips for making the process go as smoothly as possible. Read more…

Businesses rely on models and data. That said, pitfalls occur when these elements contain underlying flaws or inaccuracies. Today's newsletter examines the potential weaknesses of models and data, and offers suggestions for making sound decisions based on how the relevant world work. Read more…

Trust is a critical ingredient in the smooth flow of business transactions. As former Secretary of State George Schultz, the man behind the Reagan-era arms reduction agreements with the Soviets emphasized, "Trust is the coin of the realm." In today's newsletter, we highlight some of the ways in which you can build — or break down this valuable asset. Read more…

Lenders know how to stroke owners, including institutional owners, so they will put more money in the business. This is not necessarily a bad option for an owner, just make sure that you understand what the risks are, what you are committing to, and how you will get your investment back (and hopefully more) in the end. Read more…

The world keeps changing, so your business must keep changing as well. Towards that end, it's important to distinguish between "what people do" and "what they get done." Understanding the difference and having what people get done remain in synch with everyone else — the subject of today's newsletter — is essential in ensuring that the company can achieve its objectives. Read more…

As the pandemic rages on, we are all operating in a world that is rapidly changing. The challenge is to adapt in ways that make sense for both ourselves and our respective businesses. In today's newsletter, we discuss how to make sense of a world characterized by fragmented and spotty information. Read more…

It has taken some time, but the current pandemic has reached the point where distressed investing opportunities are beginning to appear. Generally, there are three types of buyers for distressed companies: Serial Investors, Newbie Investors, and profitable businesses that view distressed companies as an opportunity to expand. In today's newsletter, we take a look at each and examine some dos and don'ts regarding their respective approaches. Read more…

The pandemic has provided a pause with lenders and other creditors. If your business has survived, you may think there is little to worry about. Maybe that's true. But true or not, this is a good point at which to consider the potential impact of COVID on your business as the ground continues to shift over the next several months. Today's newsletter gets specific regarding how. Read more…

The Pandemic has brought about several changes and so your business has had to change, too. Under current conditions, it’s easy for things to go a bit off kilter, creating an opportunity to drift from important fundamentals. Read more…

The Fixed Charge Coverage Ratio (FCCR) is a measure of how much cash flow there is to cover fixed charges. If the ratio goes below 1, a business will go cash flow negative, absent additional financing, no matter how profitable it is. In today’s newsletter, we examine FCCR and provide suggestions for keeping yours high. Read more…

Businesses are liquidated all the time and for a variety of reasons. Whatever the cause, there are all sorts of traps that can ensnare a business owner along the way. In today’s newsletter, we talk about uncovering, avoiding and minimizing the impact of these dangers. Read more…

A loan is in default when a borrower doesn’t perform as it is contracted to do. At its most basic, that means not making payments. But there are additional requirements ("covenants") as well. In today's newsletter we consider what to do if you are in danger of defaulting on your loan or loans. Read more…

Businesses enter into agreements with other businesses all the time. But what should a business do when one or both parties can no longer honor the agreement and defaults? Today's newsletter makes three recommendations: understand what you’ve agreed to, understand what your options are, and move forward honestly and transparently. Read more…

From time to time, all businesses experience surprise disruptions. And while you may not be able to control the timing and intensity of unwelcome events, you can weather most of these through a timely dose of planning and a focus on the critical elements of your financial health. Today's newsletter explains how. Read more…

I have talked about business processes before and how important they are. As I stated then, a good process means things happen consistently and efficiently and with no surprises. In today’s newsletter, we take a look at how to know and what to do when your business processes need revisiting. Read more…

If you’ve been reading this newsletter for a while, you know that I lean heavily towards the analytical: data, facts, planning, etc. In practice, unfortunately, those are not always available in sufficient quality or quantity. In those situations — when analysis is not enough to make a wise decision — gut feel plays an important role. Read more…

Many critical business decisions are opportunity cost decisions in disguise. In today's newsletter, we discuss the constraints involved, and offer suggestions for identifying, evaluating and analyzing these situations correctly. Read more…

Every well-run company relies on data to make informed decisions. But the information is only as good as the assumptions, techniques and circumstances through which it is generated. Today, we consider some of the most common data evaluation errors and offer suggestions for improving your own analysis. Read more…

Without question, real estate can be valuable collateral for a loan, or as a source of cash for a business that is restructuring its operation. But there are many things to consider and more than a few pitfalls to beware of. In today's newsletter, we take a look at factors that need to be taken into consideration when properly valuing your business real estate. Read more…

Companies that do not financially project the road ahead are at risk of missing essential, early warning signs… signs that may signal challenges on the horizon. In today's newsletter, we take a look at these indicators and offer suggestions for honestly and realistically assessing what's headed your way. Read more…

Most businesses “Make Money.” But do they make enough? “Making Money" or being profitable is an imprecise term, one with several possible definitions depending on the measures used and the circumstances involved. Understanding your cost of capital — and translating it into practical business measures and decisions — is a critical aspect in this regard. Read on for more on this important topic. Read more…

A lot has been said and written about the differences (and, therefore, difficulties) inherent in working with today's Millennials. While I acknowledge that differences exist, for the most part, the various generations have more in common than we may realize. Instead, I recommend focusing on six areas that well-led organizations tend to share, the subject of today's newsletter. Read more…

Do you know what a Fixed Charge Coverage Ratio is? You should. A lowering of this important ratio is a warning that your company’s financial situation has deteriorated. And, the structure of your debt affects this ratio too. Today's newsletter explains the FCCR and why it matters to those who would lend you money, as well as to you, for keeping an eye on the financial health of your operation. Read more…

When it comes to selling a business, whether or not any business-owned real estate is included as part of the transaction will depend – on the seller’s circumstances, the buyer’s circumstances, and the real estate market itself. Today's newsletter explains the choices and the trade-offs involved. Read more…

There are many ways to kill a business. Taking out too much money is one of them. When you take too much out of a business, it will begin to decline and eventually fail. Today's newsletter examines the most common ways to "accomplish" this and offers suggestions for both avoiding and fixing the problem. Read more…

For a faltering company, a distressed sale is often the best way out. But selling a distressed business is not easy and very different from selling one that is healthy and solvent. Today's newsletter explains why, and offers a number of specific recommendations and guidelines for those in search of a buyer. Read more…

As an officer and/or director of a company, along with the responsibilities and rewards come certain legal risks. Think you are protected by corporate indemnification agreements and insurance? Think again. Those defenses, if not well planned and maintained, can have lots of holes and weak spots. In today's newsletter I examine how to build a good defense before the wolves come. Read more…

Government policy uncertainty is a costly drag on the economy. Policy uncertainty within your own company can be a drag too. In the economy, much is a consequence of democracy. In your own company, it is usually caused by leadership and so is avoidable. Today’s newsletter examines this important concept and offers suggestions on how to avoid creating policy uncertainty in the first place and how to manage it when you can’t. Read more…

Budgeting and planning are important, but not for their own sake. That said, doing this well — and regularly — can be quite valuable for any organization. In today's newsletter, I offer six suggestions for improving your process for the coming year. Read more…

In business, there will always be factors — both internal and external — that may appear on the horizon and that can throw everything for a loop. So, make it a habit to pause from the day-to-day and take an objective look ahead at upcoming trends. In today's newsletter we examine this concept and offer five pointers for making this happen in your organization. Read more…

No owner or investor goes into business in the hope of finding themselves in financial distress down the road. Unfortunately, it happens every day. Should that occur, there are many things you can do to minimize loss and maximize results. Today's newsletter offers some guidelines and suggestions. Read more…

When “things break down” it means that something didn’t turn out the way we thought it would — our model (or process, or understanding) has some flaws and, therefore, can be improved. Investigating these breakdowns can lead to significant and lasting gains in your business, the subject of this month' newsletter. Read more…

When it comes to audits, there are significant differences among the firms who perform these services. Choosing a firm well matched to your business and circumstances will help ensure the best outcome in terms of cost, efficiency, outside perception and final result. Read more…

Simply put, a business is worth no more than what the highest bidder will pay for it. And a distressed business will rarely fetch as much as a solvent, reasonably well performing operation. What you ultimately walk away with depends on any number of factors, including your timetable, the skill of your advisors, and many unknowns. Today's newsletter explores these factors and the options available. Read more…

Buying a business can be complicated. Buying a distressed business, while often a low-cost way to expand, only ratchets the degree of complication up further. Distressed businesses can present opportunities to grow your business, just make sure you understand the additional elements involved. Read more…

Closely held businesses with a handful of key players are different than those with a single, dominant owner or most other public or private companies. As a result, working with them, particularly in times of financial distress, also requires a modified approach. Today's newsletter takes a closer look at how to proceed. Read more…

In business, there are many decisions that must be made in the absence of definitive proof. To avoid "paralysis by analysis," business leaders can look to "robustness" for guidance in moving confidently forward. Today's newsletter explains how. Read more…

There are any number of ways to go out of business. None of them are recommended, but the lack of a viable market tops the list. Today's newsletter digs in on this topic, reviewing both likely causes and recommended solutions. Read more…

Periodic financial reviews are standard practice in businesses of all sizes. Reviews of one-time or event projections, however, are often done only by the larger companies.This oversight is a mistake. There is much to learn - and, as a result, improve - by paying attention to how project and event estimates fare once set in motion in the real world. Today's newsletter explains why. Read more…

"Cost of capital" refers to the minimum return investors expect for providing capital to the company. In order to survive over the long term, and despite whatever profits you earn, your business needs to earn more than its cost of capital In today's newsletter I explain why, and offer suggestions for managing this important measure. Read more…

Most companies do a fine job of analysis. The danger, however, is failing to step back and see the big picture by understanding the relevant pieces and how they interact. In today's newsletter we look at the interconnection of competitive systems and I share suggestions for applying this to your own business. Read more…

In business, surprises are rarely a good thing. When they are severe enough to create a crisis for your company, it's important to communicate effectively with your lender. Today's newsletter offers four specifics for doing this well. Read more…

Are best practices really best for your business? Not necessarily. They are only best if those practices are appropriate for your particular organization at this particular time. This month, we take a look at the limitations of best practices and why blindly following them can lead to adopting conventions that don't apply to your business or set of circumstances. Read more…

"Burial Costs" are the special costs that need to be paid when closing a business. Because the wind down of a company is, by definition, a singular event, it's easy to be blindsided by the processes, obligations and funds required. Today's newsletter examines the details of burial costs with an aim towards helping you minimize personal liability and future aggravation. Read more…

You won't be surprised to hear that there is no "one size fits all" solution for the location within a business of a given task. And yet this is a nontrivial question, given the significant impact on both profitability and customer experience that task location can exert. Today's newsletter considers several key factors to consider when making these decisions in your organization. Read more…

Sometimes, and when all efforts at turning around the business have failed and there are no buyers or sources of new funding, the only option remaining is liquidation. At best, it's a difficult situation, and management often fails to grasp how low the recovery will be. Today's newsletter looks at why assets in liquidation are worth far less than most business owners think. Read more…

The decisions you make as they relate to your organization can have significant impact in both the near and long term, up to and including the very survival of the business itself. Today's newsletter focuses on the importance of establishing processes for the important ones. Read more…

Collecting and analyzing data is important to make sound decisions. On that we can all agree. That said, the presence of statistical significance does not necessarily tell the entire story or reliably predict future outcomes. In today's newsletter, I examine to two primary reasons that all data is not created equal, and offer several suggestions for reviewing and using data in your decision making. Read more…

Every company encounters problems. And every company does its best to eliminate them. But what about the problems that keep coming back, despite the development of a process to fix them? Today's newsletter explains the importance of "institutionalizing the fix," and offers suggestions for getting this done in your organization. Read more…

Many companies mistakenly alarm their lenders, either by their actions or lack thereof. Today's newsletter outlines a number of things which cause lender worry, and offers suggestions for avoiding these. Read more…

Companies with high customer concentration have a higher cost of capital - particularly for debt, but also for equity. Customer concentration is best managed by avoiding it entirely. When this is not an option, and as problems arise, there are steps that can be taken. Today's newsletter explains. Read more…

Loan agreements tend to be both voluminous and boring. That said, they can and do have tremendous impact on both the operation and longevity of your business. Today's newsletter explains why you need to read and understand these documents, and maps out what to look for when reviewing them. Read more…

Every company needs a "Mad Dog" - somebody who is not afraid to speak up and challenge convention and group think. But how do you differentiate constructive objection from unproductive roadblocking? And, as important, how do you encourage more of it? Today's newsletter explains. Read more…

Understanding, determining and monitoring the critical path are all important in ensuring that the necessary work in your organization gets done properly and on time. But what exactly is the critical path? Today's newsletter explains and offers recommendations for staying on track. Read more…

Negotiating and managing performance expectations represents an ongoing, fundamental relationship between those who oversee performance and those who are tasked with delivering it. This includes both the relationship between management and their investors and between businesses and their lenders. Having a clear understanding of what goes into these numbers - the subject of this month's newsletter - will help ensure fewer surprises and better results for all involved. Read more…

Every business relies on models. But when you come across information that conflicts with your model, how do you decide if it is a "signal" or just "noise." Knowing the difference - the subject of this month's newsletter - is an important and often underappreciated business skill. Read more…

Liquidity problems are always challenging, particularly when an existing lender has said "Enough!" What often frustrates business owners and operators is lining up additional financing and then having the existing lender go silent. The solution is to address the lender's needs as well as your own. Read more…

I have written in the past about communicating to employees and creditors in a liquidity-challenged situation. When it comes to communicating with customers under these same conditions, the stakes are even higher and the considerations are different. In today's newsletter, I explain how to assess your particular situation and offer several guidelines for moving forward. Read more…

"Management by Wandering Around," a term coined by Tom Peters back in the eighties, remains an effective way of keeping your ear to the ground while ensuring that communication flows smoothly between management and front line staff. Today's newsletter takes a look at this tested concept and offers five suggestions for making your management wandering as productive as possible. Read more…

Systemic and idiosyncratic risk are two very different things. The distinction is important. When risk turns into a real problem, the best way to solve it usually depends on whether the problem is idiosyncratic or systemic in nature. Failure to make this distinction often leads to wasted time, effort and money. Today's newsletter explains the difference and offers suggestions for developing an appropriate course of action. Read more…

My early training as a new management hire taught me the importance and value of using a consistent, systematic approach to decision making This five-step process can be overlaid on most complicated decisions, as demonstrated in this month's newsletter with an example from World War II. Read more…

When working with historical accounting statements, the balance sheet will balance and tie to the statement of cash flows. If this same accounting approach is used to project financial statements, cash or short-term borrowings on the statement of cash flows are plugged to make that statement foot. But doing so masks errors in the balance sheet projection. In today's newsletter, I explain why and offer a better way to project cash flow and the balance sheet. Read more…

In an old school bankruptcy, the basic hope is to reorganize. Unfortunately, that can't always happen. At that point, debtors and creditors are left with three options for moving forward. Today's newsletters takes a look at these additional ways out. Read more…

The New Year is here with this year's ambitious goals. Most of these goals can be reduced to "more, better, faster." One way to achieve that is to do more work simultaneously. When more than one step is completed at the same time, the overall project gets done faster. Today's newsletter provides insights into sequential vs. parallel workflows. Read more…

A good business process means things happen consistently and efficiently, and with no surprises. For smaller entrepreneurial companies, the challenge is consistency and efficiency. For larger companies, the challenge is often just making the decision and managing the cost of the process. Whatever your situation, everything gets done by way of a process. Today's newsletter offers suggestions for improving yours. Read more…

You can't anticipate all that will occur in the future, but you can achieve success faster by keeping everyone's eye on the prize from the start. Taking time to define - and communicate - the end goal to those involved is an important action in this regard, and the subject of this month's newsletter. Read more…

We're all busy, with little time to review data and information that doesn't come directly to us through our respective organizations. But outside information from a wide range of sources may hold insights that are worth uncovering. Todays' newsletter looks at external "noise," and makes the case for systematically keeping an ear to the ground outside your organization. Read more…

Over several decades as a financial professional, I've spent a lot of money on attorneys and litigation. Handled poorly, litigation can be a huge waste of time, money and resources for your business. That's why today I recommend four guidelines to keep in mind as you address any and all legal challenges, to ensure that the expenses don't get out of hand. Read more…

Research has shown that we all think we are smarter and better than we really are. This results in "mind traps" - mental mistakes that can trip up business decisions. Today's newsletter identifies five of the more common mind traps and offers suggestions for avoiding them. Read more…

When times are tight, trust is as important as liquidity for survival. Today's newsletter looks at the need for centralized approval of payments and trade communications when this occurs and offers specific suggestions for getting it done. Read more…

My personal motto is this: Patience is a waste of time. But what do you do when your path is blocked, for whatever reason? Today's newsletter offers concrete suggestions for ensuring that when patience is required, you don't waste time in the interim. Read more…

Good surprises are for birthdays, holidays and personal life. No one likes bad surprises - and the world of business doesn't like any. But they will happen, nonetheless. And when they do, the key to surviving them is to adhere to a handful of fundamental principles, the topic of today's newsletter. Read more…

Shutting down a business that you've worked long and hard to build is never an easy decision. But if it comes time to fold your hand, ensure that the process goes as smoothly and in your best interests as possible by choosing the best option available. Today's newsletter explains what those options are, and how they differ. Read more…

Knowing what you don't know is important for planning and decision making. But it's the things that are not even on your radar that can really come back to bite you. The key to handling these "Unknown Unknowns" is to reduce their number and plan for their eventuality. Today's newsletter takes a look at how. Read more…

"Limits of Authority" is an essential element in creating an enabled organization. Establishing such limits has a number of benefits and a number of requirements. We discuss both in today's newsletter. Read more…

Empowerment is often thought of as a trite buzzword. But creating an organization in which people have the ability to get things done is anything but unimportant. In today's newsletter we discuss empowerment - or "establishing an enabled organization," as I like to call it - and review five necessary conditions for bringing this about in your company. Read more…

As a Business Executive overseeing others, it may seem logical to point out things that are not working, particularly when times are tough. In my experience, however, pointing people in the direction of what's wanted is both morale boosting and, ultimately, a more productive way to improve your business. Read on for some practical suggestions for putting this into action...

When it is annual plan time, before starting, make sure you know what you are trying to accomplish. Then, use the right method and process for your organization and situation. In today's newsletter, I share seven reasons for developing an annual plan, along with suggestions for getting yours done properly. Read more...

Closing the books quickly and accurately each month is an essential element in operating an efficient and profitable business. In today's newsletter, I share seven ideas for improving the speed and accuracy with which your organization gets this done. Read more...

Each of us uses models every day, in nearly all aspects of our lives. But if you don't create and apply these effectively, you're leaving knowledge (and profit) on the table. In today's newsletter I review some financial modeling essentials and provide six tips for improving yours. Read more...

A slow moving train wreck may provide plenty of warning ... but it's a train wreck all the same if the early signs are ignored. Today's newsletter examines three "solvency ratios," each of which plays a role in gauging a business's ability to fulfill its long-term debt obligations and avoid problems down the road (or track). Read more...

Lead people, manage process. You have to do both and be good at both in order to get your organization to where it needs to go. Today's newsletter explains the difference between leading and managing and provides practical suggestions for increasing your effectiveness in both areas. Read more...

Risk and Uncertainty, while often used interchangeably, are not the same thing. Today's newsletter explains the difference and offers several practical lessons and suggestions for applying this in your work. Read more...

Understanding whether decisions are short term or long term in nature is critical in conducting proper analysis prior to a decision and ... in making the right decision. Today's newsletter examines the importance of time frame in decision making and offers seven suggestions for doing this effectively. Read more...

Having control systems in place for your business is important. But having them is not enough. Today's newsletter looks at the example of retailer Target and offers five suggestions for making sure your control systems are working as they should. Read more...

Bankruptcy and insolvency - either one is almost always bad for equity holders in a business. But if you're an officer, an owner, an investor or some combination, you can lose much more than that. Today's newsletter examines the risks and offers suggestions for mitigating these losses. Read more...

Enterprise Value, while a bit arcane and complicated, is essential to valuing the stock and loans that finance a private company. Today's newsletter explains what it is and offers four suggestions for putting it to work. Read more...

When money gets tight, particularly during times of crisis, maintaining creditor trust is paramount. Today's newsletter offers four specific suggestions for building and maintaining the trust of these very important people. Read more...

Today's newsletter takes a look at leadership and, in particular, how to lead during times of crisis. Read on as I explain two simple ideas for getting others to follow when the job at hand is more than you can do by yourself. Read more...

Many of the critical questions in a wind down relate to employees. Who to keep, in what capacity and for how long? These decisions are significant, but never easy. In today's newsletter, I share four essential considerations when faced with the question of who to keep and who to lose in a business wind down. Read more...

I encounter many crisis situations in my line of work, many of which could have been foreseen or avoided with the consistent application of some basic financial management tools. Today's newsletter looks at four simple financial ratios, each of which plays an important role in helping you spot liquidity risks early. Read more...

Employee communication is important at all times. During periods of crisis, however, it's particularly critical. With that in mind, today's newsletter offers 8 suggestions for communicating with employees during stressful times. Read more...

Proper accounting and controls for inventory is, at best, mind numbing. But it's also important. So much so, that its absence is a constant, hidden referral source for much of my distressed client work. It's a big topic - too much for one newsletter. And so today,we address why it matters as well as identify some of the common inventory red flags. Future editions will consider remedies. Read more...

Return on Equity (ROE) is a critical measure of business profitability. The DuPont Formula, developed nearly 100 years ago, reveals how the many components of ROE interact and offset one another. Today's newsletter explains how. Read more...

Big problems may seem to suggest equally big actions. In my experience, however, a "small steps" approach to tackling large, complicated issues is more effective. This month's newsletter explains why "small steps" works and offers suggestions on how to use it in your business. Read more...

Tracking profitability is essential, but it does not ensure that there will be cash to pay today's bills when they come due. In today's edition of Time to Act, I explain the concept of a rolling, 13-week cash flow forecast and offer some suggestion regarding how to use this in your business. Read more...

A "Waterfall Chart" shows how much money creditors will be paid, once funds are received and distributed. It comes in handy in many situations, but it's of particular value at a time of liquidation or sale, the subject of this month's edition of Time To Act. Read more...

"Cost of capital" is the minimum return that investors expect for providing capital to the company. If your business invests in a project that returns less than your cost of capital, the value of your business is reduced. Today's newsletter takes a look at this important concept and offers five insights for understanding what it is and why it matters. Read more...

"Opportunity Cost" — the cost of foregoing the next highest valued alternative use of a given resource — is a critical, but often overlooked concept in business decision making. Today's newsletter explains what opportunity cost is and why it matters, and offers five simple guidelines for leveraging its power in your organization. Read more...

I come across many business people who think their businesses, customers or products are making money when such is not the case. In today's newsletter I explain what it means to make money and discuss four areas that are often worth probing to better understand if your business, customer or products really are making money. Read more...

The annual business planning process is rarely welcome, often painful and frequently ineffective. But it doesn't have to be that way. Our December newsletter shares a simple, six-step process for making your annual planning easier and more productive. Read more...

When companies are liquidated, many valuable "nuggets" are uncovered. Our November newsletter takes a look at some of the less tangible - and therefore often overlooked - of these. Read more...

Our October edition of Time to Act takes a look at company credit policies. Credit policies are not rocket science and are relatively easy to implement. But they are often neglected. Today I explain their significance and offer two suggestions for getting yours back on track. Read more...

Hello. And welcome to the first (of many) issues of, "Time to Act, a monthly guide to understanding and solving urgent business financial problems." We kick things off this month with an explanation of why "employee involvement" is a key element in making sure your urgent business financial problems are managed efficiently. Read more...