Sam is one of those 50+ people who just do not exist as a person anymore in this society.
He holds a postgraduate degree in business from a prestigious internationally recognised university and is known to be knowledgeable in his field of expertise and with a considerable international reputation.
After more than a handful of years overseas he returned to Australia looking to settle back into his apartment, reconnect with his grand-children, and make a contribution to the nation. He sent out over sixty CVs that most international employer companies would die for, but soon realised that his employment prospects in his country of birth – the country of the free, culturally engaged, gender and age unbiased – were nil. He was never going to be offered a job!
The one (clearly closed shop) interview he was invited to attend, stirred him to seek some feedback on what he had to offer against the prospective employer’s requirements. Simply put ‘Where did he fall short?’ The usual fluff was proffered in the feedback telephone session: ‘You know how it works’, the ‘fit’ of the person is just ‘so’ important.
Despite the writings over half a century of the renowned researcher Chris Argyris on how to create an innovative organisation (Argyris argued for placing some ‘square pegs into some round holes’ in the organisational structure), how does one respond to ‘You wouldn’t ‘fit’ here in the organisation?’
Simply put, you can’t!!!! The old fudged response that cannot be challenged (as the facts are camouflaged)!
On further and rather subtle investigation, he discovered that the CV of the department manager who also headed-up the interview team was, to say the least, extremely ‘thin’ and of little consequence in the wider world!
Sam now felt he had a much clearer insight into why he had not been offered the job. Age, experience and a fat CV!
Enough, so Sam decided to set up a business, as he had done on six prior occasions.
He had previously held Director and senior management positions in several international companies.
After 10 months of hard slog he landed his first business deal. A nationally competitive and profitable short-term contract paid for by a guilt edge client.
Contracts of this nature require upfront costs to be paid out of pocket and recouped over the duration of the contract. Thus, one needs to manage a front-end out-of-pocket regime that will eventually be redeemed over the life of the project.
Thus, cash-flow management is king!
Sam’s financial affairs were solid. He was capital rich but cash poor!
Coincidently, Sam had received a call in the past week from his long-standing bank where his accounts had been in good standing (his credit card had been overpaid for some years) asking how could it help with growing the new business.
Sam called back the bank and explained to the Bank’s SME Customer Representative to whom he had been redirected that he was seeking a 90 day line of credit for up to 20% of the contractually defined revenue from the project to manage the cash-flow lumps over the duration.
Over the next 75 minutes the Customer representative walked through a range of options to assist – from the very low cost to a high interest rate business credit card – then recommended the facility he thought best met Sam’s needs (naturally the highest cost). Sam was not worried about the high cost option as all debits would be cleared each 30 days.
Wow, a helpful bank!
Despite the bank being advised at the outset that this was the first project since creating the business earlier in the year, it demanded ‘financials’ for the past 12 months (including revenue generated and cash accounts) all signed off by the appointed accounting firm, etc, etc!
Hmm, not looking good! As Sam stated to the Bank officer, if he had all this, why would he need the up-front cash management facility?
What is often not recognised about viable start-up enterprises is they often fail due to the incapacity to fund cash-flow, not due to the failure to generate profitable business!
Thus, it is critical to ensure at the outset of the business that you have access to a facility to manage the lumps in cash-flow from day-to-day operations.
Further enquiries by Sam at his local bank branch about the person who made the initial call (who represented himself to Sam as a Small Business ‘Client Engagement’ person assigned to manage Sam’s account) was in fact an Insurance agent from the bank selling professional indemnity products and the like on behalf of a major insurance corporation aligned to the bank.
Sam is itching to get his teeth into the project, do a good job, get paid – and then……….!