Corporate Stability

If the firm is dicey, don't assume that only you and your accountant know it. Your suppliers will know about it. Your clients will know about it. Even the office cleaner will know about it. Potential instability saps morale, particularly among those who place a premium on security.

At any time, a certain percentage of ventures are financially unstable. If their main client suddenly leaves, a fire guts the premises, or a major competitor sets up shop next door, they may not have the cash reserves to weather the storm.

Until you are really established, being periodically short of cash is unfortunately the norm. The corporate bank balance usually oscillates like a roller coaster between investment and payback. With experience as a project leader or company boss you learn to live with this and put mechanisms in place to manage it.

As soon as you see that finances are beginning to dwindle take the matter seriously. Have the cashflows presented to you daily or weekly so you can take the earliest counteraction.

While you don't want to worry your staff with the details of these financial responsibilities, it's unwise to misrepresent the long-term picture. Once your staff gets a hunch that there are problems (imaginary or true) they'll understandably become worried. Their work will start to fray, their timekeeping will become erratic as they embark on a series of job interviews, and gossip can grow from embers into a bush-fire in a matter of hours. The best of your staff will be able to find other jobs easily enough, and with key members of your team missing and no money to recruit replacements, your schedules will be torpedoed.

It's always better to take a view that every software project will hit financial uncertainties at some time during its lifespan. You've got a good product. The real problem is completing the development on time. So work out in advance how you will deal with the cash ups and downs. The best defense is to shield your staff from everyday management issues and provide the stability they need to get on with their job. It's your job to protect them and their job to deliver the product.

Note These are important issues and not to be pushed aside. See Chapter 18 for more on financial issues.

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