My last marathon in the water with George S.
Business and running go hand in hand to me. In fact my first run, the Boston Marathon, came in middle of my getting an MBA. I am retired from competitive running, and now just apply the lessons learned to my business. Still distance swim occasionally. Providing workshops in a highly seasonal tourist market on cash flow planning provides a great opportunity to share my running lessons.
Early on I realized that the time to prepare for the hardships of a marathon was before you hit the “wall.” My first marathon was in 90 degree Boston heat and the king of marathons, Bill Rodgers, actually dropped out at the 23 mile mark that year. The reason, he felt so good the first 10 miles, he pushed it and failed to hydrate enough. By the time he realized his mistake, it was too late. Like running at altitude, once you get into deficit you can’t slow down enough to regain your strength. Luckily my naiveté on racing led me to start slow, drink plenty of water, and not get excited running the Wellesley co-ed gauntlet at mile 13.
Seasonal businesses run the same risks. Heavily seasonal businesses generate great cashflow for a while. Like Bill Rodgers many businesses get cash happy and push the spend pace too long. By the time they realize they are running a deficit, it’s too late. You can never slow down spending enough to keep your service up to par and regain financial health to reach the next busy season.
This, of course, is human nature. We always see great things when atop the mountain. Only the disciplined traveller also looks ahead at the descent and the valley and thinks about what is necessary to get back to trailhead.
Here’s the hard part. As I progressed in my running and my times dropped, I started to succumb to the Bill Rodgers syndrome. I “bonked” in several races where I went out too fast and “died” my way to the finish line. Success increases the risk in many cases, including cash flow planning.
So here are my hard-earned tips for businesses running the seasonal cash flow marathon each year.
1) Plot the entire course. Without a detailed monthly budget, success can go to your head and out your wallet.
2) Measure real-time relative to your plan. Too often businesses look at absolutes like ‘cash in the bank’ and fail to measure against where they should be at the point. If the business or the race course is hot early, you may need to save your energy and your cash even more.
3) The marathon doesn’t start until mile 20. Doing great during the busy season is like feeling good at mile 10. Having a good shoulder season is like that second 10. Holding back enough to actually enjoy that last 10k allows you to celebrate at the finish line. Holding back spending will allow for a slow season without the pain of hitting your financial “wall.”
Because we held back, albeit by luck, my partner and I finished that marathon and felt good enough to play in a basketball game that night. In essence, we had the reserves to go on to the next opportunity.
If you want to learn how we did in the game, you’ll have to come to the workshop. Just do it.
コメント