Holiday Pleasures or Pressures?

Cokelore_santa_left

Yes the weather outside is delightful.  (Actually we’re in the midst of several rainy days in Austin, which is indeed delightful in this drought-stricken area.)

But, you’re trying to run an early stage technology business, B2B, B2E, B2C or B2TheMoon, that does not benefit from the rush of Holiday spending, and you may well be counting the hours until about January 9 when most everyone is back on deck.  (That of course excludes BAMA and LSU fans who probably won’t regain their wits until a couple of days later.)

This is the season of “pushing a rope” for many entrepreneurs.  You want actions to happen, but there’s no one on the other end of the phone or email.  Not that any of this is a surprise, it does seem to happen every year at the same time.  However, the things you can best control, e.g. your expenses, continue apace.  The things where the timing is out of your control are the revenues or sometimes the investment dollars that cover those expenses.

There are some positive exceptions.  Many large enterprises that have fiscal years ending December 31 may have budgets to clear out and are eager to consummate transactions.   To a line manager, budget money not spent is money forsaken, so there’s a powerful motivation there.   If by now you don’t know exactly where those buyers are, you are too late.  But, I recall from my days after selling Peachtree Software to MSA that the mainframe sales team generally achieved all its annual quotas between Christmas and New Year’s Day.  Nobody in the revenue side of the house went to the beach; they finished the year in a dead run to exhaustion.  The CEO and the EVP of Sales always together wisely visited every field office in January just to re-energize the teams for the next year’s marathon.

Likewise you may find a venture capitalist that has some money to put to work and would like to have your deal on the books to dress up a year-end report to the limited partners.  I’ve been on that side of the table, and our limiteds didn’t want to see management fees being paid on cash sitting in checking accounts.   But, if you don’t have that process pretty far along by now, don’t get your hopes up.  There’s a lot of due diligence minutiae, and the necessary attorneys and accountants may go off the grid even if the principals are ready to move forward.

If you’re not so fortunate as to enjoy one of those positive circumstances, and if things haven’t gone quite according to plan, the best you can do is to be open with your employees or vendors and ask them to work with you when cash flow is diminished by Holiday interruptions.  Those who believe in your company and enjoy the business relationship will go an extra mile to be accommodating.  Those who don’t are probably not going to be part of your ecosystem when Christmas 2012 rolls around, either by their choice or yours.

Unfortunately it’s usually decisions that were made in the summer that result in these year-end pinches.   Capex outlays, counting on big deals to close fast, product delays, and rosy forecasts can all be part of the mix.   And, who doesn’t have a rosy sales forecast going into the fall?  Perhaps I should republish this article in August as an advance reminder.   Right now it’s like I’m suggesting you lay off the biscuits and gravy right after one of your arteries has just closed up.

The important issue is to understand the seasonal dynamic of your business model.  If you’re a retailer of anything that is “giftable”, you are probably enjoying making all your annual profit this month.  From my very early career in the hardware store business, I learned that just about everything is a gift in someone’s mind.  (I also learned that just about all those gifts can be returned on December 26.)  If you’re in one of the aforementioned categories where the Season impedes your company progress, all I can recommend is just to stay in the game, clear your head, catch up on your TechDrawl reading, enjoy your family, and look forward to a great 2012.

Next Up on TechDrawl:  Some observations from my semiannual Georgia Tech Research Corp board meeting in Atlanta.

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