“I don’t understand why your cash position is going down,” I said to the CEO “James”.
We were going through our bi-weekly review of his company. The revenue was growing, and the company should have been cash flow positive.
In fact, cash from operations was growing, so it didn’t make any sense why James’ net cash position was dropping.
Then James gave me the answer. “My wife wants me to repay the second mortgage on our home.”
“But there’s no loan on the books,” I said. “You can’t just take money out of the company. You have shareholders.”
‘You don’t understand. We have to pay off that mortgage.”
“I understand what you want to do, but you can’t do it that way. You’re embezzling money from your company.”
I instantly knew I would have to stop working with James because James was embezzling money from his company.
I was bummed.
I had been working with James for a while. And James’ company had gotten to a nice amount of revenue and was cash flow positive.
James was going to blow it big time if he didn’t change his thought process.
James wouldn’t change his mind, so I told James our business relationship was over.
The bottom line is you can’t work with people if you are questioning their integrity.
I don’t care how smart you.
I don’t care how passionate you are.
I don’t care that you could be the missing link to my company’s success.
I can’t work work with you if I’m questioning your integrity.
It’s that simple.
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