Logs of Lessons Learned - Part 3 Financing & Overhead



  • Debt gives the illusion of wealth. True wealth is assets, cash flow and no debt.

  • Doing a marginal deal just because the money is available is stupid.

  • Take your personal guarantee seriously…. You only bring two things to the table…. Cash and your guarantee, neither of which has an unlimited supply.

  • Don’t rely on inflation to make a deal work.

  • Never finance long-term assets with short-term debt.

  • We covered a lot of mistakes with access to easy money and credit.

  • Easy credit, lots of liquidity and too much money makes you stupid.

  • A knack for innovative financing, a little bit of money and unbridled greed will produce truly crippling debt.


  • Stay lean even if you can afford to get fat. Keep overhead low!

  • Watch your cash VERY closely. Ask yourself, “Do I really need this?… Will this help me make more money?” Once you spend it, the cash is gone.

  • Each line item of your financials should be scrutinized on a continuous basis to make.

  • Conserve cash, especially during the good times. Spending money to look like a big deal is not the same as being a big deal.

  • When you’re out of cash, you’re out of business. Cash is truly KING.

  • When the market shifts, you can’t cut overhead fast enough.

  • It is easy to over pay or beef up when the world is viewed from only an upside perspective.

  • Cut overhead early and hard. Pride and hubris kept us from cutting our overhead in a timely manner.

  • Fancy offices, hot cars, lots of staff and high overhead are signs of significance, not success.

  • Knowing your numbers, what it costs to run each aspect of your business and having timely information, is critical to success.

  • Focus on the costs of doing business and not just the revenue potential.

  • Bringing “consultants/outside services” in house (architects, land planners, engineers etc) is a bad idea. The temptation is to look for busy work to justify the overhead and when the market shifts, they are expensive to cut. Contract out as much of the work as possible

Keith J. Cunningham