To start off:
As we approach the end of the first half of the calendar year, it is difficult to imagine how the world around us has changed in these first 6 months. I was reminded to be extra reflective as we start the second half of this year and decided to give the book, “The Road Less Stupid,” by Keith Cunningham a read.
In his book, Keith Cunningham mentions that, “a crisis is a terrible thing to waste.” I want to share some of the points that he makes under the following key topics: Strategy, Deals, Financing, Team and Overheads.
1. Strategy
- How you run your business during the good times is the only true predictor of how well your business will cope with the bad times.
- Not all progress is measured by ground gained; sometimes it is measured by losses avoided.
- Speed kills. True wealth is built slowly. Speed and greed necessitate aggressive leverage and increase the odds of catastrophe. It is better to go slower and avoid the do-overs!
2. Deals
- A bad economy doesn’t create financial problems, it just reveals them.
- Don’t let what your competition is doing influence your decisions. You can’t erect a fence to keep the competition out. Besides, they do stupid things sometimes too.
- You do not have to swing at very ball that is thrown. Do fewer, better deals. Not only will you optimise the results of the superior deals, but you will also have far less overhead.
3. Financing
- Debt gives the illusion of wealth. True wealth is assets, cashflow ad manageable debt.
- Excessive debt and hope are the root of all financial crises.
- Too much money makes you stupid. Just because you can doesn’t mean you should.
4. Team
- Bench strength is critical. Find the best people, reward them well. It saves money in the long term.
- Always be upgrading your talent and never be afraid to pay them what they need to make.
- The cost of tolerating an incapable or misplaced employee is far greater than the discomfort of having a tough discussion and speedy termination.
5. Overheads
- Stay lean – even if you can afford to get fat. Keep your overheads low.
- When you are out of cash – you are out of business. Cash is truly KING.
- Know your numbers.
As I conclude:
It is important to remind ourselves of the importance of creating THINKING TIME. In this respect ask yourself the following questions:
- What are the fifty most important lessons that I have learnt?
- Where am I making the same mistakes again?
- Based on prior lessons, what do I need to go change (immediately) to avoid the dreaded dumb tax (losing money doing stupid things)?
- What are the rules and disciplines that will put in place to minimise the likelihood of repeating my mistakes again?
Now is the best time to find those who can help you through uncertain times and assist you in reaching new heights within your business.
