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Tonight We Have a Re-e-ally Big Shew - Dec 3, 2009

Posted by: Edward Baloga in Articles

This was a phrase uttered countless times by Ed Sullivan, an institution on Sunday nights. The Ed Sullivan Show ran from 1948 until 1971 (originally called Toast of the Town and renamed in 1955). Comedian Alan King once quipped, "Ed does nothing, but he does it better that anyone else on television.” The show was even immortalized in song, Hymn for a Sunday Evening, from the 1960’s musical, Bye Bye Birdie.

One lasting memory of mine is the plate spinner that would appear on the show (that and the puppet named Topo Gigio, an Italian mouse). The juggler had long, flexible poles and he would start to spin plates on top of them. He continued adding plates to the remaining poles. He didn’t have any trouble keeping the first few plates spinning. As a plate would start to slow down and wobble, the juggler would go back and vibrate the pole until the plate regained its momentum to stay in place a little while longer.

When the number of plates increased to 10 or so, he did a great deal of running around. Once in a while a plate slowed down enough that it fell and broke. He would quickly start spinning another plate on that pole. When the number got up above 15 or more, a few more plates would crash to the ground until finally, he gave up and they all came crashing to the ground.

I am sure many business owners can relate to plate spinning. In his book, The Danger Zone, Lost in the Growth Transition, Jerry Mills describes how owners (called Finders) create successful businesses by creating products and services to sell, building relationships with customers, and creating relationships with vendors. Finders perform activities that bring sales and cash into the company. This initial success causes the Finder to expand these activities. Eventually, this sales growth cannot be supported by the company’s infrastructure or the line of credit from the bank may be insufficient. Customer service may suffer and sales flatten. The cash needs of the business start to exceed the cash being generated. This is the beginning of The Danger Zone.

The Finder starts performing more and more administrative duties called Minding Activities. These might include:

Preparing financial projections
Meetings with bankers and lenders
Additional meetings with attorneys and accountants
Spending significant time deciding which bills need to be paid
Spending time on HR matters

These are tasks that many Finders may not be good at, but more importantly, do not like doing. Think of a homebuilder that has a reputation for building quality homes with fine craftsmanship. They probably did not get that reputation because they knew how to balance a bank statement.

There may be other distractions that may even cause the owner to lose enthusiasm for the business or worse, lose customers. As these disruptions increase, the business continues to decline and suffer unless the owner takes steps to turn the situation around.

If you need help keeping all of your plates spinning, call Ed Baloga, at 914.474.9547 or via email at ebaloga@b2bcfo.com.