So I was thinking about the company I work for.

It’s a privately held company that pretty much answers to no one but the two individuals that own it. Getting them to spend money gives “blood from a turnip” a new meaning. I’m not using that derogatory. If you had a company that had been in your family for three generations you’d be a little cautious about spending millions of dollars as well. It’s not easy putting your own nuts on the line and not those of shareholders. There is no golden parachute for a privately held company (but hopefully after a number of good years you’ve put some you-can’t-touch-me money away…).

So what do you do?

Easy. Well maybe…

First, because you are a privately held company and don’t have to reveal your financials, you have an advantage over most of the competition. You can buy a share of the competition (provided they are a publicly held company) and get a copy of their financials. This means you can see all claims against them, their net gains and losses and determine the health of that company. Then you can figure out what it is you need to provide to the people they supply (e.g. service, guarantees, costs) in order to get the business.

Figure out your costs of the maximum improvement you want to incorporate (add 10% – contractors and engineers always fudge about 10% to get their foot in the door. What are you gonna do – not complete the 15 million dollar project? Riiiiiiiiiiight.) Then give the owners some options (ie.e We don’t have to do this, this and this but we can rough in this, this and this for the future). This way they have a contingency plan: They are given the option to spend less money to see how the business pans out.

Maybe that’s a bit too simplistic. But isn’t it true that the more complicated you actually make something, the more simple it really is?