Feedback Form
Home Features Mastermind Forums About Advertise Blog Network Contact Be An Author

How to ensure your business becomes an asset not a liability

How to ensure your business becomes an asset not a liability
Free Download - How directors can prevent themselves being liable for their company’s debts By Michael Smyth
Name: Email:

Why Trevor’s business was a liability
Trevor’s business hadn’t run a very smooth course. The balance sheet didn’t show enough profit to attract a buyer and a due diligence process carried out by one prospective buyer had revealed that there were very few systems necessitating Trevor to be still very hands-on.
Whilst Trevor was one of the first to enter his market, competition had steadily risen over the last ten years and to any buyer it was obvious that Trevor was being squeezed out of the market as the competition marched on. His children could see this too. For them it would be hard work from year one and there were other more lucrative possibilities to explore.

Trevor’s problems started in the first year too
Trevor’s problems started in the first year of trading. Anxious to achieve new business, he was slack on chasing debts. He extended credit to clients who he thought would honour their word and then had to write off significant debt when they didn’t pay. He experimented with court action but found that costly and no guarantee that he would recover his money. He soon lost sight of his cash-flow and very early on he had already eaten into his reserves and was forced to borrow more. Unfortunately, his choice of lender was poor, so when Trevor was stung with penalty interest on a late payment, his profits took a further blow.
Lost profits meant his employees became dissatisfied
The cash-flow problems meant that sometimes Trevor was a day or so late with his salary payments. For the most part this wasn’t a problem, since his employees were understanding, except one who took Trevor to the Employment Relations Authority. She had been a good worker initially but her performance and attitude had over time deteriorated and caused enough of an unsettling atmosphere amongst the other staff to see their productivity plummet too.
Her attitude and the accumulating stress of making ends meet in a tough market had caused Trevor to snap one day and fire her without due process. Trevor was advised by his lawyer to fight this claim and although he got away with paying only $2,500 to the employee, he was fined $2,000 for not having an employment agreement and his legal bill was $5,000. At the conclusion of the hearing, he wished that he had ignored the gung-ho attitude of his lawyer and settled at mediation.

The fine wasn’t the only problem
Since Trevor didn’t have an employment agreement his intellectual property was very exposed. Shortly after the case he discovered that his ex-employee was soliciting his clients and his other employees. Dissatisfied with the lack of systems in Trevor’s business, two employees left to the rival organisation, taking Trevor’s know-how with them. To make matters worse this company started trading using a logo very similar to his.
It was a tough road for Trevor from that moment onwards. As he saw his market share gradually being eroded he felt it was time to cut his losses.

That’s why it was time to get out
Trevor had had enough. He had originally gone into business to create financial freedom and security. He came out tired and certainly no further forward than when he started. He had a business lacking in any systems, with only a modicum of goodwill amongst a very fickle client base, and a five year liability to pay rent on his office lease.
Had the promises of financial freedom and more free time been just a lie? Or had Trevor just gone about his business the wrong way?

What Trevor should have done
Building a business is like building a house. If you have no plan and build it with shoddy materials and poor workmanship, eventually someone will come and knock it down. Build it on solid foundations and it will last forever and become an asset.
The foundations of any business rest in the relationships it has with its customers, staff, competition, suppliers, distributors, agents, professional advisers, lenders and investors. Such people can either help you grow your business or they can gobble up your profits like a shark. Deal with too many sharks and your business is sunk.

The trick is telling the sharks apart from the people who are generally there to be fair and help your business. However, even the most astute businessman can be taken in by a skilful shark, which is why it is necessary to have strategies in place to ensure that the shark doesn’t cause damage to your business.

Had Trevor shark-proofed his business, then he may have had an asset rather than a liability, and have been able to enjoy his retirement.





How to ensure your business becomes an asset not a liability - To learn more about this author, visit Michael Smyth's Website.

Like this article? Share it with your friends

Article Tags:

Article Feedback
 Article Feedback No article feedback found.
  Leave Your Feedback
article feedback

Article Feedback
Michiel Jonker
As a Certified Information Systems Auditor, Michiel assists businesses in a professional capacity by evaluating the threats to their businesses. He acquired the necessary knowledge, skills, and techniques to minimize a business owner’s risk of business failure and to maximize his chances of high growth and success. He strongly believes that you CAN maximize your chances of business success, by implementing the business solution he has advocated for more than 12 years in your business plan and planning. Michiel has decided to share his experience with business owners by putting almost everything he knows in a business plan and survival guide (compiled in an e-book format) and written as a high growth SMB coaching course for SMB business owners, directors and managers - titled as the “Survival Kit for Small and Medium Businesses - Profit from your Business Risks!” According to Michiel, his goal was to add new techniques to a business owner’s business planning survival kit and instruct him or her in using these in the future - without any help from a consultant! For more information about the benefits of implementing profit protection planning in your business, please visit: http://www.business-around-the-globe.com - Visit Michiel Jonker's Website

David Barr
David Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website

Anne Barr
Anne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website

Casey Gollan
Casey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website

Kim Castle
With nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website

Jeff Foster
WebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas.  We specialize in internet consulting & internet marketing
- Visit Jeff Foster's Website

David Acheson
David Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns.  David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website

Leanne Hoagland-Smith
Are your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website


To learn more about the Evan Elite Author Program please contact us.

About The Author


Michael Smyth
(Visit Michael's Website)
Six years old sounds a peculiar time to start to legal career, but that's the first memory I have of going to my Dad's law firm located in the heart of legal London. So, with law running in the family, the natural choice at University was a law degree. I also had a keen interest in Sports Law and obtained a Post Graduate Certificate in the subject from Kings College London. I came to New Zealand for a year, but like a lot of people I quite liked the place, and I'm still here practising law as a self employed barrister and running three businesses: Approachable Lawyer, Sportscounsel and The Sports Risk Management Group (the last two even allow me to combine my passion for law with my passion for sport). So in my 11 or so years of practice I have read numerous cases, helped many clients out of the mire and set up a number of businesses. That means not only am I a lawyer with an expertise in employment and sport, but I am also a businessman. This gives me a good insight into a number of problems my clients face. I also like to pride myself on my approachability - But don't take my word for it, visit my website http://www.approachablelawyer.com/profile.htm


Michael Smyth is a Gold author on EvanCarmichael.com
About The Author

View Author Blog
View Author Blog

View Author Video
View Author Video

Free Downloads


Michael Smyth's

Complete
List Of
Legal
Articles

Name
Email
If you enjoyed this article, get Michael Smyth's Complete List of Legal Articles For FREE!

More Michael Smyth
How to ensure your business becomes an asset not a liability
How directors can prevent themselves being liable for their companys debts
Why you shouldnt copy someone elses terms of business
The Secret of Business Success
Why every business should have a strategy for growth and how to do it
Are your employees spending too much time on Twitter and Facebook
Are your dreams of retiring on the sale proceeds of your business pie in the sky
Where the Bible teaches us how to improve our cashflow
How to protect your IP being stolen by your employees
Why running your business is no different to running your car
Free Downloads


 
 
 


Evan Elite Authors
Linda Richardson  
Anne Barr  
Staging Diva  
Evan Elite Authors

Become An Author
Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details.
Become An Author

Evan's Latest Video
Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media
Evan's Latest Video




Evan's Newsletter
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
Name:
Email:
Evan`s Newsletter

Free Downloads
High Quality Sales Leads Icon High Quality Sales Leads
Making Life Work Icon Making Life Work
Positive Thinking Icon Positive Thinking
Social Bookmarking Guide Icon Social Bookmarking Guide
Meditation Guide Icon Meditation Guide
Free Downloads - Complete List

Entrepreneur Tools and Guides
Top 50 SEO Posts of the Year
Top 50 SEO Posts - 2007
Top SEO Posts of the Year
 
The Top 10 Guy Kawasaki Posts - Best Posts for Entrepreneurs
The Top 10 Guy Kawasaki Posts
Best Posts for Entrepreneurs
 
Entrepreneur Tools and Guides

SEO For Africa
SEO For Africa
MIEZAN ELISABETH ALLOUMOUA Treichville, Cote D'Ivoire,
MIEZAN ELISABETH ALLOUMOUA
Treichville, Cote D'Ivoire
SEO For Africa

If I Were A Startup...
Chris Nguyen, 30+ national clients on $0
Chris Nguyen
30+ national clients on $0
Jonathan Voigt, $214k to $507k in 2 years
Jonathan Voigt
$214k to $507k in 2 years
If I Were A Startup... - Complete List

Famous Entrepreneurs
Fred Smith, Fedex
Giorgio Armani, Giorgio Armani S.p.A.
Giorgio Armani
Giorgio Armani S.p.A.
Famous Entrepreneurs

Entrepreneur Advice
Paul Kedrosky, Venture Capitalist
Paul Kedrosky
Venture Capitalist
Michael Gerber, The E Myth
Michael Gerber
The E Myth
Entrepreneur Advice - Complete List

Popular Articles
(Premium Authors)


Have A Suggestion?

Toronto Salsa Classes / Toronto Salsa Lessons Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!

Have A Suggestion?

More Evan Carmichael
More Information