To run a business successfully, the cash into a company, over time, must exceed the cash out.

Many companies fail because they haven't managed cash well.

In large companies, managers running multi-million dollar divisions can lose sight of this, as cash is not of primary importance. This is why many large-company managers fail when they venture into the world of businessmen. Whenever they needed cash, some magical kingdom called "Corporate Headquarters" would send it, just as a parent does for a child at school.

There is no more sobering way to learn this law than to try to make a payroll with no cash in the bank.

Companies can run for a long time with negative profits, but without cash they will die.

It is part of the American culture that a company's stock price will go up when the company announces massive losses "as cleaning up their act."

It is very difficult for the layman to comprehend large corporations reporting hundreds of millions (and even billions) of dollars of losses in one quarter. Creative accounting can make the profitability of a company look good and can be misleading as it relates to cash availability and survival.

Thinking as a supplier, you must understand that a "profitable" company may still not be able to pay its bills.

A staff that stays together can only grow from experience, and with different education, personalities, motivations, and reactions to change, the rate of growth will vary for each member.

Many companies are restricted in their growth rate because they are reluctant to replace staff. However, there will always be a weak link in the chain that should be addressed. And of course, the first place a president should look to is his own position and ability to keep up.

Everyone must have a mentor to supplement "on the job experience" and this makes it necessary to bring personnel in from the outside.

Growth requires changing the culture of a company, and most likely, a staff that stays together will perpetuate the existing culture.

Whenever a responsibility is delegated, a control should be established to ensure that the task is done correctly.

Delegation is often the maturing of the manager in charge and requires trust in the person being assigned more responsibility.

A new delegation of responsibility is doomed to fail unless there is also delegated authority to match.

Delegation does not mean abdication, and the delegating manager must still make sure the task is being done correctly.

Controls can take many forms, such as policies, limits, new procedures or reports. Controls are not meant to slow down the process, but to ensure that tasks are well thought out ahead of time.

The customer will be reminded every day of poor quality, and they will be aggravated if the product isn't working or performing to specifications. Never aggravate a customer this way.

Why is it that many times it seems we cannot afford the time or money to do it right the first time, but we can always find the time and money to fix it.

Quality, far more than pricing and delivery, determines the image of a company.

Money and time invested at the front end to do the job right are wise investments.

Allowing a bad situation with an employee to continue can be more devastating than having no one at all.

There is a tendency to hold onto a non-productive problem employee anticipating a "long-awaited" alternative, but removing them will force an action (and ultimate solution) more quickly.

When an ineffective person becomes a negative force, more harm can be done than if you have nothing, and the person should be removed immediately.

Permitting a known bad situation to continue can have an adverse impact on the morale of those employees involved with the ineffective person, who question management's competency when no action is taken to correct the situation.

Most likely a customer will only pay for what they purchased, so the documentation must reflect in detail what the customer is buying.

There are many reasons a customer doesn't pay on time besides not having the money; perhaps the shipment didn't match the purchase order, the invoice didn't match the customer purchase order, you shipped too many, you shipped ahead of time, or the items aren't performing to the purchase specifications.

All the screaming in the world will not help collections if the customer is not satisfied. It is far better to put that energy into ensuring that all the documentation is correct and the product works.

It is helpful if a top executive is involved with collections to some degree, as it is an excellent feedback for entire process and helps identify internal problems.

It is important to be sensitive to what may be "bad news" to a subordinate. Especially when it requires an action, you must tell them over and over.

Unfortunately we all put up an invisible filter, easily activated, when we are receiving unwanted signals.

Upper management often gets in trouble by not wanting to accept undesired customer feedback.

A good tip-off that what has been said is not sinking in is a quick reply like "Okay," or I understand," and no questions about the depth of the input statements.

This is particularly true regarding legal matters. Haven't you heard, "I will go to the Supreme Court if necessary," -- with no regard for what is good for the company.

It is with a lack of honor that the CEO says "I did great," when he succeeds, and "My people screwed up," when he fails.

Other typical comments: "I am the only one who comes up with original thoughts," or, most often in a condescending manner, "Why am I the only one who can solve the problem?"

Never! Never! Never! Never go on line before you have a plan to get off.

Too many times a President or CEO takes a "temporary" position to straighten out a line problem and gets bogged down indefinitely, and for sure, other areas of basic responsibility will suffer.

This applies to any executive who is taking over a subordinate's role in addition to maintaining present responsibilities.

If it is absolutely necessary to assume line duties for a period of time, the time should be short, a plan should be developed, and a high priority must be given to ending the assignment.

Trying to be all things to all people (which is really an inability to focus) and poor cash management are the two things most likely to kill a company.

Even corporate giants such as IBM have proven that you can't be all things to all people.

The biggest breakdown comes from the inability to support customers as necessary.

One of the Laws of Management Physics says, "Do what you do best."

Many times you can "win" by "losing". . . by walking away from a bad deal.

Doing what you do best is so obvious, yet this law is often violated because of the desire for new experiences and ego satisfaction.

"Start up" presidents can get sidetracked from their mission by getting involved in building leases, dental plans, or media ads, when all of a sudden they become "the expert."

A "killer" for companies to avoid is jumping into a new market with a new product.

Companies should look for tasks that could be accomplished more efficiently by off-loading them to an outside source.

I have often marveled that a high-tech entrepreneur who's had ten years of math never learned that anything times zero equals zero. Hence, they are reluctant to give up any ownership when raising money, passing up an opportunity to own 5% of what could be a $100 Million company to keep 100% of their zero-value company.

There are all kinds of truisms illustrating the point: Nothing ventured, nothing gained . . . No risk, no success . . . Ask no question, get no answer . . . no leads, no orders . . .

The key word is anticipating, as growth seldom develops as fast as expected.

Anticipation has driven many companies to take on far more physical space than needed prematurely.

The added costs can become losses that are not easily recoverable.

Avoiding a bad deal can be a winning situation.

An overzealous competitive attitude can cloud judgments on sound business decisions.

In many situations you'll end up with much better results if you walk away from them.

Success cannot be judged by results alone; it must be judged against the goals and objectives.

Results considered success in one environment may be considered failure in another.

Don't be fooled when managers fit results to a newly defined objective in order to proclaim success.

Be careful, as near-term success may not be compatible with long-term goals.

Setting goals and attaining them is success; enjoying them is happiness.

Senior, key employees can be motivated more by knocking down hurdles that hinder spirit and performance than by attempts with motivators.

A great demotivator is a mismatch between authority and responsibility.

Another major demotivator is allowing a known incompetent person to continue in their position.

In my dictionary, imagination is the ability to come up with ideas having no limitation, whereas creativity requires innovation to solve a situation within the limits of the system.

Creativity is more difficult, but more effective.

For example, a salesman who says he can get an order if he pays the customer's real estate taxes is imaginative, but the salesman who says he can get the order by taking the customer to walk around a California swap meet is creative.

Some of the worst management fumbles happen when they are talking to investors. Along these lines is the manager who says, "If the market is X billion dollars, don't you believe I can get 0.1% of it?"

First, identify that there is a market need, then show that you have a product or service that will satisfy that need. Finally, convince the investor (and yourself!) that you have a plan for effectively penetrating that market.

Some ways to show you can penetrate a market are customer testimonials, good press, experienced employees, and perhaps most effective, a well-defined structure for marketing and sales channels.

The answer a worker gives to a question will depend on whether it's his peers, his supervisor, the department head, or the "big cheese" doing the asking.

People have a tendency to tell the asker what they think the asker wants to hear, particularly in sticky situations or when they fear that an honest answer will get them into trouble.

Upper managers would be naive to take answers to their questions at face value, particularly as they get deeper into the organization.

Often one manager has difficulty working in the vastly different environments of start-ups, growing companies, stable companies, and companies in downturn cycles.

Personalities have a greater effect on the performance of a manager than training and experience in the different situations.

For example, an entrepreneur would probably be bored in a caretaking situation, and a caretaker would probably be frightened of the risk-taking required of a growth situation.

If you drop a price with no recourse, the potential customer will jump on this and continue to come back for more.

It is wise to ask for a concession such as greater commitment, higher billing rates, or more support as a trade-off for improving the price.

Sales personnel, by nature, have to have a large degree of insecurity, a high tolerance for indignity, a strong competitive nature, and a well-disguised mean streak to out do (out screw) the customer.

The largest shortcoming I see in people without a "sales personality" is the inability to ask for an order, especially under adverse conditions.

When managers are making hundreds of decisions each hour, most of them have to be based on a good feel for the situation in order to be made quickly.

It is easier to make good decisions faster when the goals and objectives of the company are burned into the decision-maker's brain.

Without a big-picture view, these decisions have to be pondered and discussed in greater detail, slowing down the decision-making process and limiting the empowerment of a broader range of personnel.

Arrogance leads to complacency and indifference to competitive factors in the environment, customer needs, and customer sensitivities.

Many a company has tumbled from the attitudinal cloud that buffers the needs and sensitivities of the customer.

The sales staff wants to win, and with a bit of natural impatience, giving them the lowest threshold price is like handing them a torch burning at both ends.

If a salesman becomes too knowledgeable about the financial factors in running a business, it will weaken their ability to sell.

Be wary of the salesman who uses terms like ROI and gross margin in their vocabulary.

Engineers like to deal in the absolute, and apparently have banned the word contingencies from all their technical books.

Engineering estimates are naively based on perfect yields and schedules, as though this is the norm for their development schedules.

Engineers also have this strange idea that they can be "honest" with a customer, whereas in reality they can actually hurt the customer by giving optimistic information.

By nature there are no negotiations after you have lost your leverage.

It is best to define and make the best deal up front while you still have bargaining power.

Watch for danger when you're told, "Let's get started and we will work out a fair price later."

Competitive market delivery dates must be met, and if you are overbooked, you will have to pass.

Customers can be very fickle, and once they are forced to find an alternative source, they may never come back.

Having the customer perceive you as the first or the best can overshadow shortcomings in your product or service.

No matter how good you are, it doesn't matter if the customer has a negative of you or a positive image of your competition.

Too often, when we hear about negative perceptions from someone, we tend to discount them.

There is no doubt that missed forecasts resulting from overestimating performance can hurt a company, but underestimating what the company is capable of can result in unused potential and lost opportunities.

If a stronger performance was planned and expected, the company can take advantage of opportunities they wouldn't have otherwise, resulting in more cash available or an increased company value.