SmallBizResource Blog -- Productivity
A Nightmare You Never Want To Happen
Imagine this horrific scenario: You have to call a company meeting to explain why employees wouldn’t be getting paid on Friday. When asked why, you then have to say you don’t have good financial skills.
That’s what happened to one SMB CEO.
You can read about the business nightmare in the October 2007 issue of Inc. Magazine.
In an article titled, "My Bad, Sometimes Even CEOs Have to Say They're Sorry," Maureen Borzacchiello, CEO of Creative Display Solutions, relays the story of how her company had a major cash flow crisis that led her to addressing her employees about her inability to continue paying them full-time salaries.
Meanwhile her business had been growing steadily.
In the piece, Borzacchiello said she apologized and took responsibility for what went wrong saying, "We were so focused on accelerating growth that I didn't see it coming." She also disclosed that she had never learned to analyze real-time financials. Her accountant's quarterly reviews gave her a picture of historical financial data, but she had no financial system for regularly reviewing the kind of information that might have warned her of the impending crisis.
Just how common do you think this scenario is? Have you come near this type of business experience? How have you honed your financial skills? What tools are you using to make sure cash flow keeps in sync with expenses? Write me and let me know and I'll share all your insights here.
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