SB Informer
Tuesday, May 30, 2006; 01:29 AM
Las Vegas, NV - “Business bankruptcy is not the
answer for small companies gone bad,” says Sue Canyon, author of a new
publication that offers failing business owners little-known solutions
for make their companies profitable.
“Bankruptcy should be the last choice,” she says.
“You won’t find the answer in maxed-out credit cards and costly
consultants; nor will you discover it by depleting your retirement fund
or taking out home equity loans. Just because you’re sick of sweating
out paydays, showing no profit, arguing with suppliers and dealing with
difficult customers doesn’t mean you don’t have alternatives,” says
Canyon.
“However, alternatives are not always where you think they are.”
Generating the cash needed to keep a company afloat means owners must
“summon the courage to ask hard questions they may never have
considered before,” says Canyon. “Many people never grasp the concept
that running a ‘good’ business means a whole lot more than selling
beautiful flowers, laying smooth asphalt, tossing a mean pizza or
repairing cars to spec.”
The West Coast analyst raises three tough questions for small business owners facing a sinking ship.
1. Accounting Records – Just how good is my bookkeeper? Do I know if my
internal accounting records are correct? Do I know how to tell if
they’re not? Can I even read them? Am I making fatal strategic
decisions based on information provided by a casual or incompetent
bookkeeper?
Expert's Comment:
”Making decisions based on faulty accounting records is the number one
reason most small business fail in this country,” says Canyon.
“Ignoring the need for good numbers sets any business up for failure.
Only an owner’s sheer energy and personal resources can keep a business
with bad records afloat – and then only until those two resources are
depleted.”
Canyon talks about the client who trusted his CPA to provide costing
information. “Unwise move,” she says. “The fact is, CPAs rarely work
with costing. They typically focus on general accounting – costing is
another animal entirely. When we figured the costing properly, what we
discovered was a disasterous strategic turn the owner committed four
years earlier. Correcting this blunder netted his company $450,000 in
profit within a year -- on sales of only $3 million.”
2. Vendor Theft - Are my vendors – even the ones I’ve been using for years – stealing from me?
Expert's Comment::
“My experience shows that vendor theft trumps employee theft any day of
the week, at least when it comes to materials,” says Canyon. She
recalls a manufacturing client who regularly ordered tons of gravel but
discovered he was receiving only three-fourths of what he was paying
for, day-in-and-day-out. The owner would sign for 24 yards of gravel
and only 16 yards would be dumped in the storage bin. It turns out the
vendor was stealing more than $200,000 a year without ever delivering
the product to the yard!”
3. Production Efficiency - Is my production process (or service
delivery process, or order entry process or a hundred other processes)
killing my company? How can I know?
Expert's Comment:
“I once consulted with a company that was in line to lose a $10 million
government contract if they didn’t clean up their performance,” says
Canyon. “The client got huffy,” she says. “‘What makes you think you
can come in here and tell me how to do this better when we’ve been
doing it for four years?’ I proceeded to inspect his production line
and discovered … he had NO PRODUCTION LINE! The thing is, most
employers don’t know what’s wrong because they only know what they can
see, and quite frequently, that’s not enough. My team and I put in a
production line, met the shipping deadline a week later and voila! –
saved the contract. It’s not always important what you know. Often,
it’s what you DON’T know that counts.”
Visit www.businessbooming.com/shocking%20report.pdf
to read Sue Canyon’s free “Shocking Report.” It reveals ten business
fallacies that failing small business owners believe – and base
critical decisions on every day.
About Sue Canyon: Sue Canyon is a leading business research analyst who
specializes in repairing small companies in trouble. For more than 30
years, she has helped turn around companies operating in the
manufacturing, service, retail, distribution and sales sectors. Canyon
is the author of “Pocket Mentor,” an advice guide that focuses on cost
and production management. Her newest work, “Grand Unified Theory of
Everything for Small Business,” will be published early next year.