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If Business Ran Like the Government

Guest post by: Nate Silverman

Article Overview: The big news these days is the federal government’s debt ceiling. Every time Washington gets into one of these messes - which it does a lot - people renew the discussion about how government should be run. “If I ran my company the way they run the government…” The outcome is usually bankruptcy or prison. Should government be run like a business? That’s a debate for another article. But, the surprising thing is many business ARE run like the government. Do you understand how to manage cash flow in your business? Does your company cater to special interests, waste money or time or push problems aside instead of addressing the real issue?

If Business Ran Like the Government

The big news these days is the federal government’s debt ceiling. Every time Washington gets into one of these messes - which it does a lot - people renew the discussion about how government should be run. “If I ran my company the way they run the government…” The outcome is usually bankruptcy or prison. Should government be run like a business? That’s a debate for another article. But, the surprising thing is many business ARE run like the government.

Cash Flow: Clearly our national representatives have no idea how to control this. The word Trillion is proof enough. But, many business owners don’t either. Just, to a lesser scale. Profits don’t equal cash. And cash doesn’t equal profits. (Debt and deficit are not the same either.) Too many small businesses go bankrupt even though they are profitable, and too many companies burn through cash because they aren’t making profits. One key factor is understanding the difference between turnovers of accounts receivable and accounts payable.

Special Interests: The Golden Rule of politics is “He who has the gold rules.” It seems politicians serve lobbyists, not their constituents. Too many small businesses suffer from the same misalignment of goals. Many owners take all the profits out for themselves, and don’t reinvest in the company to ensure greater profits in the future. Other businesses will cater to one or two powerful customers at the detriment to their own long-term growth. Instead, you should stay focused and work to diversify your revenue streams.



Pork and Earmarks: “The Bridge to Nowhere” is just one of countless examples of money Congress wastes each year on unnecessary programs and projects. How often does your marketing department spend money on campaigns that don’t accomplish their goal? How much has your company wasted on expensive office furniture or artwork, motivational seminars, or someone’s pet project that had little to do with the company’s core mission or strength?

Gerrymandering: Political parties redraw districts to minimize the power of the opposition party. How often do you reassign an employee to a position where “they can’t do much damage” instead of firing them outright? Why not fire them? Because owners are afraid of wrongful termination lawsuits. The costs to defend against the suit often costs more than the employee’s annual wage and jury awards to former employees can far exceed $1 million. The cheaper and safer way to protect your company is to set up proper policies for employee performance, discipline and termination, then follow these policies precisely. It can cost surprisingly little to get this done right.

Pros and Cons: If “Pro” is the opposite of “Con” then what is the opposite of “progress”? One reason Congress is so ineffective is because everything of substance has to go through committee, or subcommittee. Talk, talk, talk. Debate, delay, filibuster. As a result, nothing gets done. Think about your business. Does it suffer from paralysis by analysis? Do you have too many meetings? Does it take too long to get things done?

Is there an easy fix for Washington? Probably not. Is there an easy fix for small businesses? Absolutely. You can learn to run your company like a company should be run. You can grow revenues and profits, not debts, deficits and disgruntlement. One place to look is the Masters of Business Acceleration program.

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Article Tags: bridge to nowhere, Business, cash flow, congress, debt, debt ceiling, deficit, earmarks, gerrymandering, golden rule, government, special interests, trillion



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Re: Obama Wants Social Security for Illegals - [quote="ChrisH":1v1r9kmu][quote="Alan Mater":1v1r9kmu][quote:1v1r9kmu] This is what happens when the Government gets involved and puts its nose where it shouldn't. Let the market correct itself. There is no reason for the Government to bail everyone out. If the businesses, mainly banks, weren't corrupted with greed, this wouldn't have happened. They are and it did, so let them dwindle away and pay for their mistakes. That's what any small business has to do. Why should they be any different. They have gotten away with it for over 10 years! Surely they should have seen this coming. [/quote:1v1r9kmu][/quote:1v1r9kmu] The same thing happened in the early 30's that's why the law to prevent these practices was put in place. But, during the Clinton administration people decided that eliminating that law would boost the economy - once again, that didn't work. Kind of reminds you of the saying that people who don't consider history are bound to repeat it. Chris[/quote:1v1r9kmu] I totally agree. Now we're paying for that mistake.


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