10. Being Cut Off by Your Vendors for Non-Payment
If you are being cut off by your vendors, either trade or consultants for
non-payment you have a problem. The problem is not that you are being cut off - the problem is that you are not managing your business properly.
9. Having Little or No Cash Reserve Even in Good Times
Some firms are constantly working from a position of weakness. They scrape by living like a financially over extended household living paycheck to paycheck. They eagerly await the mailman hoping there is a large enough check to cover payroll. If they are fortunate enough to build up a cash surplus, the owner pulls the money out of the company to buy his latest toy. The staff struggles on with outdated computers and software because there is no money to invest in the company. The owner is invariably offended when people leave the company to work for a firm that is committed to reinvesting in the company.
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Consultant's money is a drug that masks the real cash flow problems in your firm.
8. Everyone is Working 60 Hours a Week
While we generally need to work more than 40 hours a week in this business, I have seen too many firms take it to an extreme. A constant diet of 60-hour
weeks will take its toll on everyone. Over the long run it results in low
productivity, poor quality, high turnover and personal problems with your
family. To solve the problem, hire more people. If you can't find the quality people you need, raise your prices. The resulting price increase will either lower your volume of work or give you more profit to attract high quality people.
7. No Strategic Planning for Where You Want to Be in 5 Years
If you don't know where you are going you will wind up somewhere else. If
handled properly, a 3-day strategic planning retreat can produce tremendous
results. Without it your chances of professional and financial success are
greatly diminished.
6. Too Many Meetings
Meetings are certainly necessary, but some firms over do it. These firms
usually have a micro-managing leader who insists upon countless meetings even if there is nothing to talk about. If you don't have an agenda prepared and
distributed in advance, a time limit and expected outcome - cancel the meeting
until you are prepared.
5. Too Few Meetings
Yes we do need to communicate face to face with each other on a regular basis. You need to meet face to face with your partners or other key employees at least 1 to 2 hours a week. If you are in different locations, this can be done via videoconference or telephone. Be sure to be well prepared and have a standing agenda to speed things along.
4. Financing Your Company With the Consultant's Money
As tempting as it might be to use a sub-consultant's money to finance payroll, rent, office improvements, bonuses etc. It is a path you don't want to go down. Consultant's money is a drug that masks the real cash flow problems in your firm. By using their money, you avoid making the tough decisions on a timely basis. Make it a policy to pay your consultants with 2 days of being paid by your client. The result will be more cooperative consultants and a cash flow that is closer to your actual profit and loss.
3. Meetings That Never Start on Time
Meetings that start late are one of the prime symptoms of a dysfunctional
company. In my experience companies that hold meetings and consistently have
partners/employees showing up 15 minutes + late are invariably unprofitable.
This is a particular hot button with me. If it is important enough to have the meeting, it is important enough to show up on time.
2. Finalizing the Current Year's Budget in April
I have seen far too many companies start the calendar year budget in February and finalize it in April. If this is the case you have a problem. The time to finalize next years budget, is no later than November 30th.
1. Holding Your Christmas Party In February
Yes, the first A/E firm I ever worked for held their Christmas party in
February. Not because they thought it was a good idea, but because they
couldn't get it together and make the decisions that were necessary to have the party in December. Unfortunately this is how they ran their company. Is it any surprise that they aren't in business anymore?
What are your favorite signs of a sick company? Let me know