Tuesday, March 03, 2009

Under 7000....focus on cost effective solutions

Wow...The Dow Jones Industrial Average closed at a new all-time record high at 14,164.53 on August 9, 2007. Yesterday the market closed at less than 1/2 that number (6,763.29).  Quite a ride in the last 17 months!  We have a very confused Washington DC, all the politicians from the President on down are scrambling and jumping at any idea that seems like it has any chance of helping.
So what are we to do here in the business world?
Most of us have during school taken an economics or business course where we learned things like:
  • The balance sheet tells how much the business is worth.
  • The profit and loss statement tells if your business is profitable or not.
  • The cash flow statement predicts your cash balances into the future.
Somehow in all of the hoopla about stock price we have forgotten about common sense things like assets, equity and liabilities.  It became very in vogue for companies to finance growth through borrowing, but this is very dangerous and increases your liabilities in pursuit of cash flow growth.   Granted there are some valid reasons to do this, but it became so common place that many companies routinely were dipping into a line of credit just to make payroll!!!  This is wrong and is not founded in sound business principles.

Having a focus on the bottom line and affecting the profits is good common sense.  

Let's take something that we use everyday in the workplace and in almost every workplace...the telephone!  Many companies today use VOIP (voice over internet protocol) for economical and robust phone system.   The challenge is that it is still an emerging market and the vendor you pick could go belly-up during this economic downturn, or you could pick the leading vendor and be locked into an expensive proprietary solution.  Could you come up with an even better phone system?  One that is cost effective?  One that could affect your bottomline.  Yes :)  
Let me introduce you to Asterisk. (http://www.asterisk.org )  Asterisk is a versatile VoIP PBX system that can be configured to accomplish almost any telecommunications task you require!  Asterisk has the lowest total cost of ownership of any solution in any class because it is the world’s leading open source telephony engine and tool kit.   Asterisk is a worldwide community supported product, because it is completely open, it has been connected to virtually every telephone system in the world!  Check it out and other GNU General Public License open source solutions.
For example...maybe you want to setup a discussion board at your company to discuss whether to use Asterisk...check out MyBB. (http://www.mybboard.net/) Its an easy to use, powerful, multilingual, feature packed and FREE forum software package.  

Free is very cost effective.  These are both Free as in a free donut as well as free as in free speech (freedom).

1 comment:

Anonymous said...

Excellent post...To bad our current leaders don't have the common sense needed...According the WSJ ( http://online.wsj.com/article/SB123604419092515347.html?mod=loomia&loomia_si=t0:a16:g4:r5:c0:b0 )

"As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.....The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy....Listening to Mr. Obama and his chief of staff, Rahm Emanuel...They seem preoccupied with...picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want."