The book

THE POWER TEST

The 52 Laws of Business Power
Max Noble

23 questions about your own company. Tick yes or no. Every yes is a law your company may be breaking today: read that chapter first. Ten minutes, one pen.

  1. I

    If a new chief executive took over tomorrow, would they stop protecting your best-selling product?

    Leave the Throne Before It Leaves You · Check: Ask two levels down what they would stop doing if they ran the company.

  2. II

    Could a customer buy everything you sell, at the same price, from your own supplier?

    Own What the Supplier Cannot Price · Check: Count what share of your sales only you provide.

  3. III

    Is your growth paid for with loans that fall due before the customers pay?

    Never Mistake an Order for Payment · Check: Compare the two on your three biggest contracts.

  4. IV

    Does your name, or your best-known promise, depend on a price you cannot control?

    Stand for a Reason, Not a Number · Check: Listen to that sentence.

  5. V

    Does your plan to repay your debt depend on a deal that has not happened yet?

    Never Let Debt Outrun Your Cash · Check: Halve that product, then set the cash beside your yearly interest and repayments.

  6. VI

    At your product's lowest price in ten years, could you miss a debt payment?

    Borrow for the Worst Year, Not the Average · Check: Test your budget at the lowest price of the last decade.

  7. VII

    Has your company moved the same debt to a later date more than once?

    Treat a Lender’s Patience as a Loan · Check: Write down what will be different when that time runs out.

  8. VIII

    Does your company pay its bills with money it is holding for customers?

    Never Spend the Money You Owe Your Customers · Check: Find out where that money went.

  9. IX

    Do the notes in your last annual report raise any doubt about the business continuing?

    Always Read the Footnote, Not Just the Number · Check: Read the notes to the last annual report.

  10. X

    Do you pay for the work long before your client pays you?

    Never Build Faster Than You Get Paid · Check: Put that number beside sales.

  11. XI

    Is your project funded more by people who love it than by people who buy it?

    Let Cash, Not Love, Build the Factory · Check: Count how many people have actually paid, and compare that with what the next stage costs.

  12. XII

    Would your company need its owners to add more money within the next two years?

    Keep Owners Willing to Write the Next Cheque · Check: Name who would put more money into your company if it needed it tomorrow.

  13. XIII

    If your largest borrower failed tomorrow, would you have to run their business yourself?

    Take Only the Collateral You Can Run · Check: Ask what you would do with that security if a customer failed.

  14. XIV

    Would your company lose money if interest rates rose by five percentage points?

    Never Become a Bank by Accident · Check: Ask what would happen to profit if interest rates doubled.

  15. XV

    Does your main loan fall due within eighteen months, with no new terms agreed yet?

    Refinance While the Banks Still Smile · Check: Find the date.

  16. XVI

    Does your growth plan depend on a regulator, a court or a partner saying yes?

    Build Growth That Needs No Permission · Check: For each one, ask what you would do if the answer were no.

  17. XVII

    Is your company switching a core system before the new one has passed a busy season?

    Test the New System Before You Trust It · Check: Ask who can stop the switch, and how stock and orders get checked in the first month.

  18. XVIII

    Does your company pay rent or fees to a business controlled by your own owners?

    Give the Shop and Its Landlord Different Owners · Check: Ask who set the price and when it was last checked against the market.

  19. XIX

    Has your company sold buildings it still uses, to pay off debt?

    Count the Rent Before You Sell the Store · Check: Put the rent schedule beside the sale price, and ask what share of a bad year’s profit it takes.

  20. XX

    Does your debt plan depend on sales your company has never yet achieved?

    Build the Rescue on Sales You Already Have · Check: Compare the sales figure it assumes with last year’s actual sales.

  21. XXI

    Do you earn most of your money from a product a rival could make cheaper?

    Sell the Service Before the Box Gets Cheap · Check: Split revenue into one-off sales and money that comes back every year.

  22. XXII

    If lenders offered your owners a small share to save the company, would they refuse?

    Take Part of the Rescue, Not the Ashes · Check: Put both outcomes on one page for the board.

  23. XXIII

    Have you made a big move this year without asking the partners your customers come for?

    Guard the Brands That Bring the Crowds · Check: List your five key partners and the days you take to pay each.