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Growing Your Career: Reversing the Effects of Financial Mismanagement
By Victoria L. Rayner
Posted: April 28, 2008, from the August 2007 issue of Skin Inc. magazine.
In today’s unstable economic climate, it is incredibly important to identify actions that can be taken when an enterprise is in danger due to the result of poor financial choices. Monetary trouble due to fiscal mismanagement most likely occurs because not enough attention was paid to financial or legal advisors. Or, perhaps no professionals were consulted, or the numbers weren’t evaluated as well as possible. Maybe inventory was overstocked too often, receipts weren’t monitored diligently, operating expenses were misjudged and financial setbacks were not considered.
Generally, things start to get out of control when there is a lack of accuracy in recording and analyzing profits and comparing them with losses, as well as a lack of insight into budgeting requirements and restrictions. Regardless of the reasons, financial mismanagement is an enormous blunder that can—and does—cause spas to go under. The most essential task a business owner or operations manager must complete is troubleshooting in the event that the company is failing.
A problem-solving approach
If the unexpected should happen to a business you own or are responsible for, you want to be left standing. The act of financial troubleshooting can be a do-it-yourself endeavor with enough review and study coupled with the appropriate measures for solid crisis decision-making. Strategic thinking is essential for planning financial reversals, and developing and implementing viable solutions. It is vital in order to strategically outline urgent tasks, address daily objectives, and overcome short- and long-term monetary challenges.
Financial maladies differ from one operation to another, depending upon the individual set of circumstances involved. However, there is a five-step framework for troubleshooting that can be very effective.
Face up to your financial woes; stop pretending there isn’t a problem. Deal with anxiety as well as you can. Embrace some form of solace so that you can sensibly attend to matters at hand without being distracted by the uncertainty of the situation.
Define the scope of your troubles. Have a financial advisor work with you to determine the exact extent of your monetary problems. Pinpoint the challenges, and consider short- and long-term implications, as well as possible avenues of resolution.
Create a solid structure for financial survival by prioritizing your actions. Decide what your immediate focus must be and where you want to direct your resources. Create a list of action steps.
Talk with your creditors and be honest about your circumstances. Attempt to come to a realistic agreement.