CASH Decisions: A Family Business Story



Cheryl Doll recently wrote an article about Monopoly and the tie to cash in a business.  As I read the article I thought back to a simple but very effective exercise that any business owner / CEO / division head, etc. can implement right now.

Back in 2008 I was working with my dad (Wayne Herring Sr.) and a highly effective executive leadership team - Rob Faust (CIO), Ray Walsh (COO/CFO), and CJ Zaruba who was the President of our sister auto finance company.  I was a Family member, a leader in the business, and I had a very small ownership stake.  The other members of the team were not family members but they were leaders and also had small ownership stakes.  I had family members (siblings) who did now work in the business and who did not have ownership in the business but they had grown up receiving the fruits of the businesses' profit.  The 3 Circle Family/Ownership/Business model diagram used by Compass Point now shows me clearly some of the dynamics that were going on in the business.  


Family business is beautiful... and complicated.  


Back to 2008... it was obvious that something was coming... the Great Recession.  


My father had been through one of these before and he proactively gathered the leadership team together to look at our most recent detailed income statement... LINE by LINE.  


We sat around a table and we simply analyzed where we could reduce spending or eliminate it entirely.  We determined which items could be renegotiated. This was BEFORE the crash of Lehman Brothers and Behr Sterns. We got ahead of what was coming - thankfully.


The thing that I remember most was that we made the decision to stop drinking Starbucks Coffee. May seem trivial in the whole scheme of things, but stay with me.


Leading up to this, business had gotten a bit easy and we were living high on the hog.  Our people (and me) drank a LOT of coffee and we were buying the good stuff.  We were able to cut our substantial coffee bill in half!  The coffee example is representative of many other improvements we made in the expense area. 

  • We took a hard look at Marketing expenses... what was working. 
  • I took a hard look at my sales territories and salespeople... who was producing results and who was not.  
  • We stuck with coaching for our team.
  • We introduced automatic ACH payments and a credit card payment option and pulled about 15 days of cash into the business by getting contracts and payments in house faster than usual.  

In short - we started paying attention.   As they say, "that which gets measured gets improved."


What made these decisions possible? Our leadership team trusted each other.  We had been through "Five Dysfunctions of a Team" training together.  We did not try to protect our turf.  We talked openly about which expenses would lead to growth and stability.


EVERYONE on the leadership team became aware of how much cash we had saved.  Prior to this only the CFO and CEO really watched this.  Now we all talked about "Dry Powder"  (a witty term for cash CJ Zaruba introduced to all of us). I loved those people on our Leadership Team and we felt a strong bond as we worked together through that difficult time.  


Gather your team together TODAY and start looking at cash and start making it real.  You can go through and figure out where you could spend less and where you should spend more because it's an investment that is paying off.  Go through an income statement line by line.  Help everyone picture the stack of cash that each line item represents.  


Go through the type of training that allows your leadership team to develop trust and accountability and that allows them to have passionate discussions.  


If you have a family member on your leadership team, talk openly with that person and with the non family members about the difference between family relationship and the business roles of your leaders.  Avoid talking privately with your family member about items that should be discussed publicly with the rest of your leadership team.


The Recession of 2008-2009 turned out to be pivotal in our growth as a company.  We weathered the storm, kept spending money on the right kinds of marketing, we invested in our salespeople and sales leaders, we made IT improvements and we had a clear strategy at all times.  Several of our competitors went out of business during the recession and our salespeople knew all their clients and we got the phone call when that car dealer needed to find a new service provider.  We came out of the recession with almost exponential growth.   


Business consultant Ram Charan says that Cash is the Blood of your business.  I agree.


Thanks Cheryl, for reminding me of the day we stopped drinking Starbucks everyday at work AND the lesson behind it!  

It turns out the coffee tastes better as cash on hand rather than cash served in a cup.



Meet our guest blogger!

Wayne Herring
Business Owner Coach and Consultant

I help entrepreneurial men who are building businesses and who love the outdoors to create the life they want. Our mastermind groups and events and coaching will inspire you and give you a place to grow.


Connect with Wayne on LinkedIn

Learn more about Wayne at:



@2019 Compass Point LLC - All rights reserved