Posts Tagged ‘Finance’

Category Number Seven?

Sunday, January 25th, 2009
Money Troubles?

Money Troubles?

In both the first and second editions of Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses (Wiley, second edition, 2008), we presented a framework for six categories of disaster from the high-frequency/low-severity category of human error all the way to the high-severity/low-frequency extreme of terrorism and sabotage. Ellen Heffes, the editor-in-chief of Financial Executive, had suggested to me that it might be appropriate to add a seventh category of financial disasters, owing to the meltdown of the capital and credit markets. Ellen had invited me to contribute a bylined article to the magazine (which will appear in the April 2009 issue) and certainly the credit crisis is at the top of every executive’s agenda. I would not change the framework of disaster categories that had been set forth, because we had explicitly defined disaster to mean an event that displaces your business and extends to longer and longer period of remote operations, based on its severity. The financial crisis would not qualify for our treatment, although I am certainly considering writing a book on finance for small businesses. However, I would be remiss not to mention it, because the financial and credit crisis is certainly creating stress for my business. Like many small business owners, I am caught between the proverbial rock and the hard place, trying to collect monies that I am owed from large corporations (that should have behaved more responsibly) while remaining current to obligations that my business has to small vendors. A recent article in the Wall Street Journal indicates that I am not alone. As I read the WSJ story of the small business in California that has no hope of collecting the $53,000 it is owed by Lehman Brothers, I thought of the futility of the current government focus on strong-arming banks to extend their loan portfolios. Is it time for a new book on small business finance?