When do you know to stop and make a change?

mailbox_250WOne of the big headlines today is that Canada Post is eliminating doorstep delivery and cutting up to 8,000 jobs in an attempt to make a dent in the $6.5 billion (yes billion) dollar pension shortfall.  Imagine the problem the government would have on their hands trying to figure out how to solve that problem while keeping the population happy about getting door to door service!  The comments and debate is interesting but misses a key point – when a business is not covering their obligations they are bankrupt.  It’s simple.  As any small business owner or individual can attest, you cannot keep ignoring your bills forever – at some point the music stops.  Here are three common responses from businesses I talk with about their costs exceeding their cash:

1.  We didn’t plan for “one time” expenses that never seem to be “one time”

2.  We didn’t realize that our business plan required the kind of capital we don’t have access to

3.  It has taken us longer than we thought to figure out our margins and how to pay our bills while earning some profit

There are more comments I could share but the underlying theme is one of management and planning.  There are times when risks need to be taken but when are risks not longer risks and simply foolish decisions?  Is the responsibility greater if you are a government agency?  Is it less if you are a government agency?  If your business is struggling to meet its obligations there is lots of help available to get you back on the right track.  Tough decisions may have to be made but they are inevitable if you find yourself in a place where your business is not generating the results it needs.

While not wanting to be too harsh on the cost cutting angle I feel it necessary to mention that businesses (and individuals) should look at all options including how to increase revenue opportunities using existing resources as cost cutting only works over the short term and arguably limits future opportunities.

“Good government is the outcome of private virtue.” – John Jay Chapman

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