Don’t Know Much About Business

The folks at the Washington Post are questioning the business acumen of Herman Cain. This would be funny if it weren’t so sad. Our president came into office with no business experience, either good or bad. Even bad business experience can be good. It tells a person what not to do next time. Learning from mistakes and failures has turned a lot of businesses around. Apple learned this the hard way. They fired Steve Jobs. Apple struggled. So did Jobs. Jobs found himself in NEXT and Pixar, and Apple reinvented itself by rehiring Jobs.

In an interview with ABC News’ Jake Tapper, President Obama said the following:

I guarantee it’s going to be a close election because the economy is not where it wants to be and even though I believe all the choices we’ve made have been the right ones, we’re still going through difficult circumstances.

It’s obvious that the president and his team of advisors, who also have not had any business experience, either good or bad, have not learned anything from their policies. They are failing.

The definition of insanity is doing the same thing over and over and expecting different results. The president would have made a bad businessman. He would continue a policy that increases expenses and decreases revenue because he believes it’s the right policy. I’m sorry, but that’s not the way business works. There are a lot of ideological business enterprises out there that fail miserably.

Governments don’t have to worry about markets because they are in the force business. By the force of law they can compel people to do things. Healthcare is a good example.

The market is where policies (products and services) are tested. If they fail in the marketplace, it’s time to reevaluate the policy. You may have to lower prices, retool the product, cut expenses, layoff a few people until cash flow increases. These are hard decisions, but most business owners have had to make them one time or another. Insanity would be to follow the status quo business model that is wrecking the company.

My business partner and I make these types of decisions every day. We run five companies.

When the economy turned down in the fourth quarter in 2008, I had to make some hard business decisions for the company that I’ve run for 30 years. I took a cut in pay and laid-off my wife who was working part-time in a salaried position. She was the first employee to go. More were to follow. We’re still in business, but with a smaller staff.

Herman Cain had to make similar decisions for Godfather Pizza. If he hadn’t closed stores to save money, then there was a good possibility that all the stores would have closed and everybody would have lost their jobs. Unlike the government, the Godfather Pizza Company could not force to buy their products.