Leadership in tough times, Part 5

Do you suffer from Porsche Syndrome?

My friend Ruth King sees this a lot.

She advises business owners on profitability.

Too many think they can spend and spend.

They really should run for Congress.

That’s where you spend other people’s money.

Just because you have cash, don’t waste it.

She knows several of these business owners.

One lost out on a loan due to Porsche Syndrome.

He bragged about his $2,200 monthly Porsche lease.

His business was footing an extravagant lifestyle.

His investor was not going to loan money for that.

He invested in businesses to help them grow.

And he expected to be paid back with interest.

He wasn’t going to invest the “finer things of life.”

Some owners use their businesses to buy boats.

Or to buy expensive homes and cars.

To write off expensive vacations and resort visits.

They put non-working relatives on the payroll.

They don’t invest in their businesses.

They invest in themselves and their lifestyles.

How stupid can you get?

Ruth King says enjoy the fruits of your labor.

Just don’t do it at the expense of your business.

Save your cash for downturns. They will come.

Save for rainy days. You’ll have your share of them.

How do you avoid the Porsche Syndrome?

Make sure you generate reasonable profit margins.

You can actually save relatively painlessly.

For example, save 1% of every check that comes in.

If your deposits total $10,000, put $100 into savings.

You’ll never miss the $100.

And, that $100 will start earning interest.

Here are three questions for you.

1. How many business expenses can you avoid?

2. How much of the savings can you escrow?

3. Where can you get the best interest rates?

Next: Creativity in business.

Jerry Bellune's family owns and operates book and newspaper publishing companies in Lexington. He leads Master Mind groups for business owners. For details, contact him at JerryBellune@yahoo.com