If You Are Not Taking A Paycheck You Need A Workout

We see it all the time, a business owner alleges he does not need a workout but when asked if he is taking a paycheck he answers with: “No, not for a long while” or “Yes, but not very much. Only occasionally.”

Let me be clear, the first sign that you need to do a workout is when you feel it necessary to stop taking a paycheck, or to take a small one, or only an occasional one. Do the workout! There is little sense in running a company that cannot pay its senior manager – the owner – let alone retain some profit for growth and development, repairs and emergencies.

Of course you need a workout. Why are you doing this if not to earn a living and build equity in your business so it can be sold at a gain? The workout is the responsible thing to do. You are running upside down and must face reality. A workout is the only way to avoid the inevitable, what will happen in due time. You cannot run a business forever that does not pay its way and you cannot sell a business for more than its debt if it cannot return a profit adequate to warrant the investment. Do the workout now, when it is most meaningful and timely, then concentrate on growth and development.

I know, you think maybe things will change and this is part of your investment. Please stop kidding yourself. Growth and development are a direct function of available capital to invest. If you cannot take a paycheck, you cannot possibly grow and develop. You are, in fact, slowly self-liquidating. That’s the truth.

The workout preserves your assets and provides a second opportunity.