Category 3. Business

Regulatory Relief

I had a lovely conversation with an old friend yesterday. Knowing that he’s running a business that will be hurt – perhaps devastatingly – by the present shutdown of large parts of the US economy, I had called to offer moral support. We spoke for quite a while about our families and the travails he’s facing in his business. In the course of our conversation, he reminded me that the business that I had helped run survived the 2007-2008 Great Recession relatively unscathed only because we had had the great good fortune of having gone into that storm with a so-called covenant-lite (i.e., no covenant) bank facility.

That absence of ratio-based financial covenants allowed our company to sail on – in spite of calamitous losses that could’ve triggered a forced sale of assets at fire ...

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Small Businesses

Every new business is somebody’s dream. Somebody’s hope for a better life. Somebody’s worry.

A would-be entrepreneur starts with a question: how can I serve people better than they are now being served – with higher quality, lower prices, greater convenience, something they want?

And its doppelganger: what if I am wrong? How much will I lose – in terms of time, money, heartache and effort – if I’m wrong about what others will want or I can produce?

For most of those who take the risk, everything depends on getting the answers to those questions right – his (or her) livelihood, his family’s well-being, their standing – and likely presence – within their community, their prospects. Everything. After failure: the abyss.

Every time I see a small business fail...

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Scenes From A Life In Business

Dear Readers:

This extended post is a compilation of stories about business the great majority of which were originally written as separate posts between November 25, 2018 and January 2, 2019. I have reordered those posts chronologically to make the meta story easier to follow. These stories focus almost exclusively on my business life, with few references to my other interests; even so, they tell the story of a very personal journey.

The big picture: I was employed by what was then one of the largest US banks from 1980-1990, then by a British merchant bank until mid-1993, at which time I left to co-found a tiny investment banking firm. In 1998 I sold my interest in that business and became the junior partner to a man to whom I had been the financial adviser since the mid-eighties...

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A Paean to Risk

A former colleague of mine once said something wonderful:

“If you are not making any mistakes, it’s because you’re not making any decisions.”

When I consider the single characteristic that is most vital to the success of an individual, an organization or a society, I conclude that it is a willingness to innovate. Whenever we try to freeze time, and lock in the benefits of now, we consign ourselves to a future failure that will be far more painful for our efforts to avoid the change that is inevitable.

What is this innovation, then, that is so important at every level of society? It is, quite simply, the product of risks that have been taken. Note that I do not assert that it is the result of risks taken successfully, because it is also the end product of all the risks that were ta...

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