BIZ BITS: The Business Comb-Over

Miller & Martin PLLC Blog | August 16, 2019

We have seen it: the obvious combover. The guy’s hair is thinning so he grows one side a little longer to comb it over and disguise the thinning spot. It might not even be conscious, at first. It’s a fib, at worst, and makes him feel more confident. Fast forward a few years. The thin spots are thinner, the comb-over is longer. Perhaps he has introduced product to hold it all in place. Most of the time it looks good. Indoors, low-wind sunny days, normal conditions… you can’t even tell.

Then it rains, it’s windy, conditions aren’t normal. The product doesn’t hold and he’s got a flag of hair flying over his now-obvious bald spot. The “fib” is exposed as a full-on lie of vanity and he’s embarrassed. We feel for the guy, but it is not fatal. Perhaps we take him a little less seriously.

Businesses can have comb-overs, too. Someone wants to impress their peers, their boss, their clients, their spouse, their friends, or the folks at the “club.” They use the healthy parts of the business to disguise the thin spots, and it works, for a while, as long as conditions remain “normal.”

What happens when the business climate is not “normal,” though? What happens when conditions become adverse? What happens when the business moves into uncharted territory? How will the business comb-over hold up?

Some examples of events that can expose a business comb-over include:

  • Bank financing
  • Investor due diligence
  • Asset sale
  • Stock sale
  • Lawsuit
  • Indemnification demand
  • Insurance claim
  • Governmental audit
  • New major contract

Will a change in the business climate expose your business’s comb-over, or will your business look as good in the wind and rain as it does indoors?

Tags: Bank Financing, Investor, Due Diligence, Assets, Sale, Stock, Lawsuit, Indemnification Demand, Insurance Claim, Governmental Audit, Audit, New Major Contract, Stock Sale, Asset Sale, Investor Due Diligence

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