The Difference Between a Rut and Grave is Just A Few Feet | Financial Strategy
Winston Churchill had a saying, “When you’re going through hell, keep going.” At some point, all entrepreneurs face immense challenges with their businesses, which put them in positions to either persevere or crumble. Being under intense pressure is the irrefutable law of being the guy or gal at the top of the company. Usually, first-time security consultants face challenges which include things like; not enough time in the day to get everything accomplished, constantly negotiating with vendors, dealing with employee problems, facing stiff market competition, or complying with government regulations. But, without a doubt, the biggest concern facing business owners is the struggle to keep the cash flowing!
Financial Strategy for Consulting Firms
The number one reason businesses fail is due to a lack of cash flow. To keep the lights on, you gotta keep the money coming through the door on a consistent basis. Even a month or two without revenue can sink a small consultancy. Hence, the importance of always keeping your sales pipeline full and your expenses down. Additionally, everything in your company – from employees and marketing campaigns to the espresso machine and ink cartridges – needs to be measured according to their ROI. But what do you do when the cash has already dried up? Do you keep going or do you stop and re-evaluate?
Personally, I have been guilty in the past of saying, “Don’t worry, even if we can’t afford it now, we’ll close enough business to pay for it down the road.” I have learned – sometimes painfully – that this is not a solid strategy. In fact, it is very easy in business to have a little bit of early success and suddenly decide to bite off more than you can chew financially. Just because you sign a nice contract today, doesn’t mean that you can suddenly splurge on unnecessary investments tomorrow, or that your success streak will continue indefinitely.
So, with all due respect to one of my favorite historical figures, Mr. Churchill, sometimes you need to recognize when to keep going and when to flat out stop. Because sometimes when you keep doing the wrong thing – i.e., spending too much money – the difference between a financial rut and a financial grave can be a matter of just a few feet.