Chris Bjorklund: Hello, I’m Chris Bjorklund for the Business Resource Center. Today, I’m talking to business coach Steve Rosebaugh, president of Focal Point Coaching. A lot of really smart CEOs, Steve, hire business consultants because they want to improve their businesses but they don’t really understand how a business coach might be able to help them too. What are some ways that coaches are really different from your other paid advisers?
Since 2007, banks have been nervous about establishing working capital lines of credit for their business customers. Knowing some of the secrets of securing and using your line of credit will help make sure it is available for use when you need it.
This article addresses collection of business accounts (B2B transactions). If you extend credit terms to consumers you must follow a very large set of rules set forth by the Federal Trade Commission and possibly (if you are a Texas business) the Texas Office of Consumer Credit Commissioner.
No business should sell to other businesses on credit without having a credit policy. Banks don’t loan money without a written policy in place and neither should you. Your business may not want to be in the lending business but if you offer terms other than cash you are a lender and need to protect your company from slow and non-paying customers.
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It’s that time of year! As a business owner, we know we should “do” strategic planning, but many of us will admit it is not our strength. The shortcomings of a bad strategy are usually painfully obvious—at least in retrospect. In a recent survey of senior executives at 197 companies conducted by the Marakon Associates and the Economist Intelligence Unit, respondents admitted their firms achieved only 63% of the expected results from their strategic plans.
Chris Bjorklund: Hello, I’m Chris Bjorklund for the Virtual Business Center. Today, I’m talking with Jan Triplett, the CEO of the Business Success Center in Austin, Texas. Lots of consumers are potential customers for any kind of business, Jan. How do I choose the best kind of customer for my business?
One of the best ways to really understand financial results and what’s possible in the way of improvement in your business is to look at what drives results. What are the relatively small number of key drivers of your financial success? And a key driver is not necessarily a financial measure.
What your mom taught you about telling the truth is still good advice. While it may seem to go without saying, at least one judge has reaffirmed your mother’s rule: “it’s not okay to lie,” even if your contract says you don’t have to tell the truth. In Abry Partners V, L.P. v. F&W Acquisition, LLC, the court had to decide whether a very explicit disclaimer of all warranties and representations would be enforced to limit the liability of a company that had knowingly made false representations to induce the sale of the business to another company.
On its face, the disclaimer was very clear – the company that made the false representations had no contractual duty to tell the truth to the acquiring company, and any liability for false statements was limited to a predetermined amount. While the exact wording of the disclaimer may be too long to repeat here, it might as well have said: “Company A may make any false statement or misrepresentation to Company B to induce the sale, and Company B’s only legal remedy shall be capped at XYZ dollars.” This kind of disclaimer was written in two different sections of the sales contract.
Yet writing something in a contract doesn’t necessarily make it so. Judges have broad discretion regarding the enforcement of contract terms. Even though both Company A and Company B were sophisticated businesses with teams of legal professionals to advise this multi-million dollar transaction, the judge in this case held that it would be against public policy to enforce the disclaimer and to protect the company that made false representations.
What’s the moral of this story? Honesty isn’t just the best policy – it’s the law of the land, and no wording in a contract will change that. Further, as a general rule, you can’t rely solely upon the wording of a contract to forecast the outcome of potential legal disputes. Ultimately, courts strive to preserve justice, and a judge may easily override overbearing or unfair contracts.
Making more and more money in your business is what financial success is all about. That’s not greed. That’s just the reality of business. You have to be constantly focused on improving profitability, improving cash flow, and increasing the value of your business.