Cash Conversion Cycle Red Flags Changing economic realities mean businesses can quickly face alarming cash shortages

In my work helping companies transform themselves to take better advantage of economic opportunities and to manage risks more efficiently, working capital risks are frequently overlooked even though they are at the front line of risks faced by companies of all sizes. The cash conversion cycle, an important liquidity measure that usually forms the core of a company’s working capital,

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Jawbone lessons

Jawbone, best known for fitness wearable technology, went into liquidation last month in part because of too much funding, according to CNBC. I believe that this is a good case study for some of the companies in the GCC that receive easy funding. Too often, certain investments are deemed strategic and then there is a blind mandate to fund them at any

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Crisis Response Strategies

This entry is part 3 of 3 in the series Strategy

In a world of uncertainty management is constantly evaluating potential risks as they unfold and deciding how to respond. At one end of the response spectrum is what might be called the Anglo-Saxon Fast & Furious model: ignore all risks until they become an existential threat of such dire proportions that there is only one available response and it is blatantly

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Who Wins, the Trader or the Investor?

The perennially favourite discussion topic is trading versus investing. What’s the difference? Is it short time horizon versus long time horizon? Is it growth versus value? Is it Soros versus Buffet? This post is a continuation of my 2007 article in The National. Reading the previous article is not necessary to benefit from this post, but looking at the ideas

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Scaling Profits

Why do so many start ups manage to reach cash flow break even and often manage to break through that barrier but then get stuck in terms of growing their profits much more than that? Arguably the number one reason is that entrepreneurs have a fear of failure. This is normal, only sociopaths and narcissists feel no fear. The problem lies

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Breaking the cash flow break even barrier

I recently covered the challenges of managing negative cash flows. Breaking through the cash flow break even barrier is a completely different matter. Start ups seem to reach this point and never leave it, a gravitational black hole not unlike the friend zone. Understanding this statistical anomaly requires a mix of finance and psychology.

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Cost Management Insights for Entrepreneurs

My basic philosophy on business is that opportunities and challenges are continuously presented to us and we need to respond appropriately. When it comes to managing challenges it makes sense to prepare in advance. My experience is that many entrepreneurs have difficulty doing this at two key points: right after a round of funding and when their business goes cash

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Managing Negative Cash Flows

All entrepreneurs and many executives face in their professional careers the dreaded negative cash flow scenario. For entrepreneurs this is a normal phase going from start up to, hopefully, mature company. For CEOs it can happen during an economic downturn or if the company had previously made serious mistakes or faced a catastrophe. The underlying mistake that these managers nearly

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