Sometimes the stress of cash flow, business planning and the general day to day grind of people’s jobs can lead to some really bad decisions. Generally the really bad decisions are ones that are made quickly or out of an emotional response, rather than a business response.
The business decisions that people struggle with are often dealing with hiring/firing of employees, refusing to extend more credit to a customer or starting to do business again with a former client or partner that you previously had refused to do business with.
Let me start with the “easy one” from my point of view, which is the last one. If you are dealing with a relationship that ended badly, to the point where you were in litigation, you likely should not restart your business relationship. I stress business relationship as opposed to personal relationship. Personal relationships can continue or re-establish themselves after litigation – but once you’re have to pay a lawyer to deal with a business relationship, do the smart thing and ensure you won’t have to pay the lawyer a second time to deal with the same party.
The refusal to extend more credit to a customer is also an easy issue from my point of view as well. However, I appreciate that many business are concerned that they will lose a customer. To those businesses I often ask point blank: “if someone is not paying you, why would you want them as a customer?” A customer who doesn’t pay on time is losing your business money. Consider the cost of “financing” the receivable, together with the lost employee productivity and ultimately legal fees involved in getting paid what you are owed and the clear business decision is: if a customer fails to meet your terms, do not extend credit and use 30-60-90 Sue, as discussed in earlier blogs.
Finally, there is the often difficult issue of employees, particularly terminating employees. If you have the responsibility of hiring/firing, then be honest with yourself and your business: you know when someone needs to go. It’s amazing how quickly one bad seed can come into a great work environment and poison it completely in a matter of weeks. Do not terminate in anger though, consult a lawyer and be sure you do it properly to avoid further fall out. But remember: the longer you wait to terminate someone who truly needs to leave, the more damage they do.
In keeping with the theory that all we ever need to know in life we learned in kindergarten, I’ll leave you with this thought from my Kindergarten teacher : “think before you act, but don’t wait a long time before acting.”