A company’s balance sheet is the face of its financial status, or its “financial health,” as Gary W. Patterson refers to it in his first book, Stick Out Your Balance Sheet and Cough. Patterson, a veteran of the corporate world with experience in accounting, IT, sales, manufacturing and HR, has produced a simple, yet effective checklist for determining a company’s health by asking questions such as “Are you satisfied with your capability to project available cash over the next six months?” “Do you operate from at least a three-year strategic plan?” and “Do you really know your top 10 customers both in terms of revenue and total profitability?”
He explores fiscal vision, appetite for risk, why cash is king and business pricing models. He even tackles the good, the bad and the ugly of going green with your business. Written in a fun and casual tone, Patterson’s tiny tome is a good read for both entrepreneurs and C-suite execs navigating the enterprise of business.
Perhaps the most unique advice Patterson offers is that business owners and executives should pay close attention to their most profitable customers-and even suggests prioritizing business with those 20% of customers that give you 80% of your business. But where Patterson’s book excels is showing (and emphasizing) how companies can identify and assess potential and current risks to a business. He devotes one chapter to examining five areas where risk can lurk within a company, which is welcomed knowledge in any business environment. In the end, Patterson successfully explains how companies can check their vital signs and diagnose problems before they affect the balance sheet.