09 Jan A Parable: Business Consulting and the Platinum Shoe Lace
In my earlier days I used to do a lot of one-on-one business consulting.
Troubled business owners would hire me to right their wrongs. Sometimes they would even offer me to purchase their bankrupt businesses because I knew exactly how to fix them. A little word to the wise… Broken businesses are broken for a reason. There is always a reason. Most of the time it trickles from the top down.
Some business owners are just plain ol’ stupid sometimes. However, I’m not complaining or judging. I’m just pointing out my observations. However, one business owner was not just stupid he was crazy. You know – 5150 type of crazy – like that Kony 2012 kid that was caught running around naked beating his head on a street pole kinda crazy.
This manufacturing company was going under and in a BIG way. They manufactured shoelaces. No shoes, just the laces. I don’t know about you… But people just don’t buy laces by themselves very often. They had a huge surplus of unsold laces and weren’t able to pay their bills.
There wasn’t much for me to do there.They had seen this place before several times and each time they barely clawed their way out of it; only to find themselves in the same predicament months later. Does the definition of insanity come to mind – doing the same thing over and over expecting different results?
They kept spending without cutting. Simple math would tell you that if you keep spending and don’t make any cuts, you run out of money! However, this moonchild from the 60’s had spent a little too much time with Timothy Leary if you know what I mean. I mean his brain was not just cooked but fried.
His brilliant solution was to create platinum shoelaces made with real platinum. Like a sliver platinum at best would be woven into it. We’re talking about maybe, and I mean a BIG maybe, a total of $5 of platinum would be used. It would cost nearly $600 to create the darn thing by changing out all the machinery and working the platinum to be so thin and malleable enough to use without damaging it.
However, the best part of this whole whack-o idea was that he would sell the laces separately for $100K each or $175K for the pair. WTF?? Really? Who would buy such a thing? Not to mention that at the most with the amount of platinum and labor costs involved these laces could only be worth about $650.
His reasoning was that they needed $150K to pay off their outstanding debts and what was left over would be his bonus for averting the financial crisis to his company. Oh, if only it was that easy! They tried it and failed miserably. No one bought the laces. Big shocker there!
The banks seized their property and sold their remaining assets for pennies. As for the owner of the company… Well, he turned out to be so financially progressive they gave him a job at the US Treasury where you don’t have to pay your taxes and you can print money on demand.
What’s worse is that we have a congress that just avoided a fiscal cliff and gave themselves a nice raise as a pat on the back. As if that wasn’t enough, to avoid the debt ceiling they’re planning on creating a platinum coin worth $1 Trillion dollars.
Yes, this is REAL, unlike my fabricated shoelace story. They’ll deposit this Trillion Dollar Coin with the FED and pay down the debt with it. Essentially creating something from nothing. Unfathomable!
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