I have always had the thought that businesses with plenty of cash can tend to be loose with it. This often leads to poor financial controls and a poor return to shareholders.

Given that in most small businesses the shareholders themselves are making the decision to spend,  the result can be very well masked. This can lead to cash being directed to areas of little value or way too much spent in areas where better value can be achieved, often at a much lower cost.

Widely reported anecdotal evidence would suggest, and experience shows, that there are many businesses which misdirect or overspend their advertising budget for example or have talented staff who would be more gainfully employed using their core skills.

A considered review is the first step towards better resourse allocation and superior returns.

There is an interesting summary of a research publication in Strategy+Business entitled “A Bright Side of Financial Constraints in Financial Management”. The review itself contains some very good information.


Strategy+Business is published by the global mangement firm Booz and Company.

It might be worth a call to Accross Business when you return from your Christmas break to see how their expereince can help you.