If you think I'm going to talk about the evils of money... well, I'm not!
By warning you about "too much money" I mean that pouring money into your business to solve problems can actually backfire.
We seem to be programmed to think that if we throw enough money into our business, we'll be able to resolve whatever is keeping the business in the red.
More often than not, the injection of money will result in nothing but added debt.
One possible exception to this is needing funds to fill purchase orders (this usually happens when there's rapid growth and demand exceeds supply). But even then, every dime must be accounted for and any inventory must be carefully tracked.
Otherwise, an injection of funds will rarely solve a "money" problem. The problem almost always isn't about money but something else.
This reminds me of the time I was hired by a leather goods manufacturing company to help them turn their company around. They were one of the leading companies in their industry and had a good chunk of the market. The problem was, new competitors where popping up and they had to maintain razor thin margins to keep their accounts from leaving them.
They were urging me to "bless" their request for a loan in order to "help them grown" (their words). I told them the problem wasn't going to get solved with more money. The problem needed to be fixed by increasing the average sale per retailer and getting better prices from their suppliers.
And that's exactly what we worked on. We renegotiated the deals they had with the suppliers to much more favorable ones; and we created incentive programs that encouraged a higher average amount per sale.
Voila... the problem solved... and company was saved!
So my advice today is, before you dump more money into your business to solve problems, look at other aspects of your operation -- marketing, management, employees, business culture, sales competence, customer service, suppliers, expenses, product/service itself, lack of systemitized process, or a plethora of other things.
Until next time...
