A pet hate of mine and an instant turn off is when businesses use money they owe to other businesses to run their business. This was the main reason amongst others why we closed down our packaging business during the lockdowns. When businesses are struggling they will never openly tell you where they stand financially and if they are a big enough customer the chances are if they go under they will take you with them.
I heard about a business the other day that went bankrupt 4 years ago and has reopened under another name, but besides the new name it is exactly the same business. I am not sure how this works legally for a director, but one could place another family member as director and bypass this altogether. I do believe if it is he same director then there is a 5 year rule or something to that affect which has you under tighter credit controls.
One has to be so careful which new clients you pick up and use any contacts you might have to obtain the right information which will help you decide whether they are a risk or not. I mentioned last week I had spoken to our neighboring business sharing the warehouse and have spoken to the land lord to help with the financial information. They thankfully are in a strong financial position which removes the worry.
Lockdowns put many businesses under huge pressure and cracks started to appear especially with cash flow. I noticed a change when companies were phoning us out of the blue for supply which rarely happens. Under normal circumstances you would make contact first and not the other way around. When a company is struggling to pay their bills then they would seek out another supplier and where the risk lies.
A "friend" of mine who I have known for close to 15 years and who you would think is wealthy due to his lavish lifestyle tried to get me to supply his company which we rejected. His lifestyle of owning a big house and flashy cars is supported by debt he owes other businesses. This is not something I would ever contemplate doing as not only is it morally wrong, but if you have a conscience how can you sleep at night. Sadly there are many so called rich families living the dream yet they are more broke than the rest of us. Imagine living a life of debt lying to everyone o a daily basis.
During the lockdowns I noticed the very big companies changed by moving from 30 and 60 day accounts to 90 days which is no different really from other companies not paying their bills as all they have done is stretched their payments out to nearly 4 months. These companies are funding their entire business on suppliers debts they owe. If you have the funds to supply without getting paid for 120 days then that is great, but not something I would agree to.
These people do not care about anyone, but themselves and know if the business goes bust they will open another one and not much has changed. Legally they are able to do this by sticking the business in the wife's name and only have I think a 5 year wait until their name is cleared. I do enjoy working for myself, but you do realise very quickly how many risks there are around and not everyone is as honest as you are.
