You might know that Sean and I have been in New York this week, taking a long promised trip that’s been on our bucket list for over 10 years now.
Among the many things we packed into our 5 days in this bonkers city was the cruise around the island and we were lucky to have as our guide a chap who as well as being a “resting” Broadway actor, was a New York historian and author, so we had the most fascinating guided tour.
Why does New York have so many skyscrapers?
New York is ranked second for having the most skyscrapers in the world, 241 to be exact, and when you consider the size of the place compared to other cities, and that it’s an island, that’s pretty amazing.
And when you look at the city, the sky scrapers are all concentrated down-town and mid-town, with a big flat bit in the middle.
But it didn’t happen that way by accident.
Apparently New York is built on super-strong bedrock, the remains of a huge Alp sized mountain range that makes it possible to have built these tremendous structures. If the ground had been “normal” then this famous skyline just wouldn’t exist. The skyscrapers are only there because of the strength of their foundations.
Always on the look-out for a blog idea, this really got me thinking. What a great analogy for business survival and success.
You simply can’t build a strong business on weak financial foundations
We know that 80% of businesses fail within 10 years, and those who survive tend to last the distance. So what makes these businesses different?
It’s rarely luck. That might get you through the first couple of years. The businesses that make it are built on solid financial foundations.
- The business owner has learnt to understand finance – I’ve seen very few successful businesses where the owner didn’t have a total grasp on all things financial.
- They’ve consistently built a strong balance sheet.
- They make a healthy level of net retained profit – between 5% and 10%.
- They’ve not been greedy –they leave money in their business to fund growth and lean times (which always happen)
- They have their sales and marketing cracked – they know exactly how to generate sales and have a strong consistent pipeline.
- They control and manage their cash well, they have their taxes put away, and have cash buffers to see them through the unexpected.
How do you think your business measures up? And how strong are your financial foundations?