bizsolutionsplus Featuring Solutions to Grow Your Business

Executive Pay Not Tied to Value

According to The Compensation Game, authored by Lucian Bebchuk and Rakesh Khurana and published in August 2006, "in setting executive pay, as we document in our research, directors have not been guided solely by the interests of shareholders. Instead, they have had various economic incentives, reinforced by social and psychological factors, to go along with arrangements favorable to top managers. The nature of board membership, combined with the small size of the overall director community, results in a closed culture among people who share many relationships: those with whom board members are economically involved are the same as those with whom they are socially linked through shared status, organizational affiliations, and social standing."

Money, Money Everywhere but Not a Drop to Drink

If we were isolated in the desert, the value of water would far exceed that of money. However, most of us don't run our businesses from an isolated desert location. So money becomes a necessity.

Unfortunately, my consulting experience suggests that most entrepreneurs don't have enough of the green stuff to grow their business so that revenues create sustainable profits. The sad truth remains that some entrepreneurs don't have enough money to sustain their business long enough to create sustainable profits.

So what to do? What is the elixir that fixes our cash flow and profit challenge?

Truth? There is none. However, here are a few recommendations that may help keep you afloat until income exceeds expenses.

1. Create a business plan before you start your business.
2. Within the plan, be sure your numbers best reflect reality, so you know before you put out the open for business sign that you have enough money to keep the business up and running until positive cash flow occurs.
3. Create a realistic strategic plan that includes measurable goals, strategies and tactics for success before your business opens and don't shelve it. Use it! And measure, measure, measure, adjust, adjust, adjust.
4. Be certain your strategic plan aligns with your business plan.
5. Sell great customer experiences, not products and services.

And from Seth Godin, here are three more rules:

1. Great product development and marketing almost always comes from organizations that don't have enough money. Having less money keeps you from trying to buy your way out of trouble.
2. Learning to live with less money means you will develop skills and resources instead of buying them. And it means that when you have less money (again), you will be prepared.
3. When you need money for something specific, go get it. But just for that. With good terms. As soon as you spend money to protect your money or leverage your money or account for your money or send a message about your money, the money is not only wasted, it hurts you.