CA seed money drying up
No surprise that California's continuing budget problems resulted in a significant drop in funds available through the California Small Business Loan Guarantee program. Why? Because a chunk of its trust…
Have a Truth Teller onBoard?
I'm a relentless advocate for outside board members in family businesses, in large part to divorce the value of objective business discussions from subjective family dynamics. I've seen a family…
No Jerks Allowed!
Many of you have seen articles about this general theme recently – in part a function of "The No A**hole Rule" published last year by Dr. Robert Sutton of Stanford…
Business Finance | Does EBITDA Bury Its Own Dead?
Does EBITDA really tell you what you need to know?
“I have enough money to last me the rest of my life … unless I buy something.”– Jackie Mason
Does this sound like you?
Someone recently told me that they’re bored by finance. “Don’t distract me with strategic finance stuff, just let me run my business the way I know how.”
“No problem,” I said, “if you’ll just answer one question. What if the way you’re running it is causing increasing strain on your financial resources, cash flow is dwindling and you’re destroying market value every year. Do you care about any of that?”
“Of course, I do, but when sales start picking up again, all of that will go away and my EBITDA will return to normal levels.”
“Really?” I said. “How do you know that?”
“That’s the way it’s always worked.”
“Have you had any problems with your banking relationship?” (more…)
White House Jabbing about Jobs
As I’ve said here before, I don’t think our elected servants in D.C. know much about creating jobs. Let’s remember that the stimulus program was always “too little, too late” and we harped here that the length of time over which those funds would be deployed was way too long … witness today that jobs officials say more than 50% is still in the pipeline over one year later. So, no surprise it hasn’t help as much as they would have you believe. Robb Mandelbaum writing in the NY Times also agrees that there is very little in President Obama’s most recent speeches flowing from the Jobs Summit last week.
What do you think of the ideas being floated about, the key ones of which are summarized here? Will any of them help your business? Are there other ideas that could work? Fire up those fingers and add your comments here.
For one thing, the Administration continues to talk about incentive programs to spur business lending. While that would also be welcome, it doesn’t get at the root cause of unemployment and jobs growth. I’ve reported here before that lending is NOT the biggest problem in the middle market … it’s demand and revenue growth. Companies are not going to borrow except to meet demand and if demonstrable demand is present, borrowing is usually easier anyway.
One idea is to eliminate the capital gains tax for small business investing. (more…)