Take Five #141: How the “Proof of Cash” process can expose untruths in business financial reports, and more
Top five must-reads this week in the world of SMB acquisitions and operations
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Take Five #141: How the “Proof of Cash” process can expose untruths in business financial reports, and more
1. “Scaling Past $3M: A Technical Guide to Information Systems That Reduce Coordination Costs”
When your business hits rapid growth, something unexpected happens. The systems that once made you efficient start to break down. Most leaders think a $10 million company is just a bigger version of a $3 million company. They're wrong, and this misconception is costing them dearly.
The Invisible Force Working Against Your Growth
Let me introduce you to a fascinating paradox: Metcalfe's Law in reverse. While this law typically explains why networks become more valuable with more connections, in business scaling, it reveals why your organization is slowing down.
Here's what happens: You hire one new office manager. Simple enough, right? But now they need to coordinate with:
You (the leader)
The warehouse team
Sales representatives
Procurement specialists
Customer service
Accounting
Each new hire doesn't just add one communication line – they create exponential complexity. Our research shows that companies spend between 25-45% of their time just managing information flow. That's nearly half your productive hours spent not creating value for customers.
Read Joshua Schultz’s post here.
2. Huge thread about Lower Middle Market and Main Street deal sizes, with definitions, valuation methods, and what to expect at each level
3. A heavy dose of business philosophy to kick off the new year
4. 5 search criteria questions to answer before you start your search
5. How the “Proof of Cash” process can expose untruths in business financial reports
Loved what you read? Subscribe to Take Five to get our top quick reads every week from the team at Kumo. Kumo aggregates thousands of sources into one easy-to-use platform so that you can spend less time sourcing, and more time closing deals.