I work as the primary "middle manager" for a small business (6
employees) that has existed for 15 years. The business had always
gotten by okay (without ever really "thriving") until three years ago,
when the original owner sold us to a new owner.

Since the new owner took over, the company has been slowly descending
toward financial ruin. The owner denies it, but I've seen the cash
flow. My job is to oversee the employees, not to make financial
decisions; in fact, the owner would prefer I wasn't aware of the dire
shape we're in.

This company has an amazing team of employees. We work long and hard
for pay that is substandard, because we like what we are doing and are
fiercely proud of our product. Our product is acknowledged as the best
in its field, yet we constantly seem to be one step away from going
under. This was not the case with our previous ownership.

Where can I find useful advice on dealing with bad ownership in a
small business? The problem isn't that the owner is a difficult person
(he isn't; he's very easy to work for), it's that he is frittering
away our profits by making terrible financial decisions. When I bring
up the subject, he simply says, "Don't worry. The company is okay."
Meanwhile, we can no longer afford to keep up with equipment my
employees need to do their jobs properly, we are behind on bills, and
we are starting to reach the point where we will soon not be able to
make payroll. Again, when I point this out, the owner's response is
"Don't worry about it."

What steps can I take to ensure the company's survival - and my
employees' happiness - despite the owner's continued determination to
throw all our money away?

The owner may want a negative cash flow operation for tax purposes.
(S)He would be unlikely to clue you in to such a fact.

Your fiduciary duty, assuming you have one, is to point out in writing
your concerns. If you have any legal obligations, you should consult
an attorney.

I think it's time to jump ship.

How about standing by while the company unravels, and then buying it
at pennies on the dollar?

bigblue has a great idea.  either way you can't loose.

if the owner wants a negative cashflow, you will get paid for doing
nothing.  if he is truly an idiot and you know better than him since
you've been in the biz longer, when it fails you will buy it from him
and set it straight.

again - great idea.

Hi

Sadly there is not much you can do other than offer to buy the business.

What he may need is a business consultant that can turn the business
around or hire a MD to run the business for him.

A lot of businesses are hand to foot, but the skill is in the cash
managent.  I have seen company last for years and years like that only
because they where very good at cash mangement.

The problem could lie with the sales team.(This is what business is about!!!)

You may want to aproach your old boss and see what he is doing.

Good luck

if you are planning to go into business it might be worth looking at
<a href="http://www.scopulus.co.uk">www.scopulus.co.uk</a>