Chapter 11

Conclusion and Business Resolution

Apply the sleep test

The Sleep Test originally related to a person's level of borrowing. If you wake, bolt upright, in the middle of the night, worrying about paying that loan, then the level of borrowing is too high.

Different people have varying levels of tolerance to the Sleep Test. People, like the entrepreneurs of the 1980s, must have been good sleepers.

Some people I know hate debt and have little or no debt both in their businesses and private lives. The businesses are successful and they survived the excesses of the 1980s and the hard times of the early 1990s.

The level of your debt needs to be determined by the Sleep Test and consultation with your accountant. Just remember, debt is not always good.

The Sleep Test applies further to business decisions. Our management meetings now use the sleep test philosophy. All matters brought to the meeting must be noted on the agenda with papers distributed before the meeting. Matters raised at the meeting which have not been placed on the agenda are never resolved at that meeting. A recommendation may be made but no decision is made until the next day, to allow for the Sleep Test.

This avoids knee jerk decisions. This Sleep Test applies to all decisions.

There is nothing wrong with deferring any decision one day.