Why not find a way to improve your finance and personal life? Most readers will shake their heads yes on that statement. Surely such a lofty and personal benefit is worth a little work and soul searching.
Admit where you are guilty of the same lack of leadership in your life or business as skeptics say big banks are. There is a new phrase used to describe the banks renegotiation of real estate loans on struggling businesses. Extend and Pretend is described as the practice to extend the maturity, and reduce principal payment amounts and interest rates.
Think of this as a more sophisticated version of home loans with little or no payment on principal and teaser interest rates. The argument is that giving borrowers more time to pay the debt will be less costly than what would happen if the banks took over the real estate and ran the business. Skeptics call the practice “extend and pretend”.
Before you get too comfortable and maybe even indignant about those fat cat bankers and their business dealings, look at yourself in the mirror. Stick out your balance sheet and get real.
Where in your life or business are you extending and pretending instead of demonstrating leadership? Where are you putting off tough decisions or even facing up to reality?
Where could you solve something today, versus extending and pretending and use those resources of time, people and money to take advantage of the opportunities that are beginning to show up for opportunity seekers?
You may even have most of the basic pieces in place to get started. Take a look into your budget, financial model review, enterprise risk management process, cash projections, executive team discussions, employee suggestions, or prior off-site meeting goals and objectives. Combine that with a realistic look at what items you are carrying at unrealistic historical values or obligations you have not been willing to resolve for ego or political reasons. Get real about your exposure and what these issues are costing because you are unable to pursue the opportunities that are now appearing for those businesses with resources.
Why not do a risk assessment combined with reviewing growth opportunities or strategic planning initiatives that are stalled for lack of cash? If you are unable to do this internally because your key people are not available, or because past mistakes or egos would be involved, get outside consultants or expertise involved.
Calling this an enterprise risk management update or business model review may even provide the emotional political cover to get it done. And getting it done to increase efficiency and profitability is what leadership is about.
Bottom line? – Control your financial destiny! Capitalize on hidden high return opportunities, while limiting exposure to risk.
Risks are what really go wrong when you are not looking: stupid things like bounced checks, losing your best customers or best people when you are blindsided.
You need a perspective of business under the microscope and to have lived to tell the tale. After analyzing and helping over 200 companies, I have learned one key point:”What You Don’t Know About Your Business Can Cost You Your Business.”
