Financial strategy — the most important, and most overlooked, business strategy
February 2nd, 2010
Let’s start with a bit of word association. When I say the word “Miramax,” what immediately comes to mind? You might say, “great movies,” or “Cinema Paradiso,” “Shakespeare in Love,” or “Harvey Weinstein.” All of these are fine, but for someone on the business side of films and entertainment, the first words that come to mind are “brilliant financial strategy” or “raining money.”
Why? Because when the Weinstein brothers started up their film company, their first concern was not movies or awards or glitz or glamour, but instead financial strategy, particularly a financial strategy unlike that of any other studio or distributor. Sure, you can say that films like “Il Postino,” “Cinema Paradiso,” and “Shakespeare in Love” made Miramax successful (and you’d be right, at least from a financial perspective), but lots of studios and distributors release highly entertaining, high-earning films on their inexorable path to bankruptcy (just ask Dreamworks).
In all my journeys in business, I have rarely encountered a startup, entrepreneur, or business “expert” who regards the financial end of the business as anything other than an odious housekeeping task, the strategy equivalent of washing windows. It’s all that other groovy stuff, like product development, marketing, social networking, branding, market research, and leadership that gets all the attention, effort, and energy of entrepreneurs and experts alike. Let’s be real. It’s just a lot more fun and exciting to write and read about purple cows and new rules of marketing than, say, operating margins and fixed costs.



