Tuesday, January 15, 2013

Utilizing an Expert; is Not an Expense, it’s an Investment - Smart Business Thinking




Utilizing an Expert; is Not an Expense, it’s an Investment - Smart Business Thinking


The company has been in business twenty years. It was starting to expand operations within the local scene.


I was asked to analyze the business plan for the expansion.  I explored the Cash Flow Assessment & Management and was confused. Something was not falling into place. The current cash flow was out of balance. 

The lease on the new space called for rent to begin on a specific date. When that date arrived, the space was still under construction.  The company's revenue and profitability were taking a hit by paying rent for space they were not using.

solid management process would call for the company to consult a knowledgeable resource (such as a real estate attorney) to review the lease. That would have avoided the cash drain. 

Bottom Line?
I directed the CEO to try to negotiate the removal of that clause. Fortunately the landlord agreed to waive that provision. If the company considered using a resource in the area that was unfamiliar to them, the fee would be an investment, not an expense, and operating income would not have taken a hit.

Jim is an expert business coach and a respected advisor to management and financial executives. He draws on his long-term business leadership background to help CEOs grow revenue, increase profits, improve performance.   

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