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How NOT to run your business


My friend, Pete Ingellis over at Ideal Cleaning Solutions (www.ideallyclean.com) recently posted the following on his business Facebook page: “New York State – the Empire State – can you be any more unfriendly to business. Really? Another tax is due 8/15. Wake up before it is too late!”

My response was to go on a Facebook rant; part of which I would like to share with those of you who are business owners, as well as those who are watching the nonsense that goes on in Washington, Albany (NY), and I’m sure in many other state capitols. Please understand this is not meant to be a political statement supporting one party/position or another. It’s meant to show how our politicians and political process is an example of how NOT to run our businesses.
For the purpose of background, Pete’s statement was based on the fact that New York State had to borrow money from the feds to fund their unemployment insurance coffers because of the obvious hit they took during the recession. But now, because they can’t afford the interest (surprised?), every employer is being fined (um, excuse me, “assessed”) an “Interest Assessment Surcharge” which is a mandatory fee paid per employee! I made that payment last week and I’m still incensed!

And it got me thinking about the lessons we can learn from our politicians about how NOT to run a business.

What’s are the lessons?

1) Financial Mismanagement: Just imagine, for a moment, that you were borrowing and spending more than your business could possibly support. What would happen? Well, if you pass the fees on to your customers, you’ll probably get the same response that New York is getting from its businesses: “We’re outta here!” (As many businesses are packing up and leaving the “Empire State.”)

2) Lack of Financial Oversight: Suppose you had a number of departments and/or subcontractors that had little if any oversight. How many $1200 hammers and screw drivers could you afford to pay for?

3) Dysfunctional Decision Making: Imagine if your Board (or your partner) were so split on making critical decisions that you spent hours/days/weeks posturing and spouting self-serving nonsense, only to ultimately make a decision just before a mandatory deadline that was vague, weak, ineffective and non-constructive. How would that work for you?

4) Disregard For The People Who Support You (ie: Your Customers!): Imagine if the least important consideration of any decisions you make would be the impact those decisions would have on your customers. How long would they remain your customers?

5) Giving Your Workforce Away To Competitors: Imagine if you decided to send your workers to your competitors to enable them to be used to create products less expensively than you can. How long do you suppose you could compete with those lower prices?

6) Leaving Your Building Unsecured: Imagine if you decided to leave your building or office unlocked so that anyone who wanted to could simply come on in and make themselves at home. This would include the ability to place themselves on your health insurance plan and take advantage of all of those programs you have in place for your employees (assuming you haven’t sent all of your employees to your competitors as in #4 above!).

7) Have Departments Within Your Company Send Out Contradictory Information To Your Customers: Imagine that your marketing department is telling customers that there is a big sale in progress, as well as a lucrative financial incentive for referring business. At the same time, your financial department is advising customers that a price hike will be coming in the near future. How do you suppose your customers would react to that conflicting information?

8) Important Decisions Impacted By Self-Serving Outside Influences: What if the members of your Board (or your partner) were so influenced by marketers and others offering kickbacks and lucrative bonuses to use their products, that the quality of those products became less important than the personal benefits they would reap. I wonder how your customers would react if they knew that their needs were less important to you than the kickbacks or referral fees?

9) Vendor Mis-Management: Suppose your decisions to pay your subcontractors were arbitrary. In other words, when money was tight, you would simply tell your vendors and subcontractors to keep working for you, but to realize they may not be paid in a timely manner. What quality of work and commitment would you expect from those vendors/sub contractors?

10) Finally: Broken Promises To Your Business Acquaintences, Referral Sources and Network: How long do you suppose you would be in business if you made elaborate promises to your business partners – those who typically support you during the dry times – only to throw them under the bus when it was convenient or expedient?

I think you get the idea. There are a lot of questions about why businesses aren’t hiring and each party blames the other. The reality is that, as a small business, we have to plan our budgets just like the big guys. And when these people in Albany (or Washington) decide to lob over another fee, something has to give. In most cases, because of the uncertainty over what the next bombshell will be, employers choose to delay hiring as much as possible because, well, we don’t want to be like Albany and Washington and over-extend ourselves! In my case I might be talking about ONE job. Our counterparts in the Fortune 500 arena are talking about HUNDREDS or even THOUSANDS of jobs.

And we wonder why people can’t find jobs? Don’t blame the corporations, blame these “statesmen” that we send to represent us who wind up spending money like drunken sailors! (With apologies to drunken sailors!!)