Last night's Panorama with Theo Paphitas was good. You can watch it on BBC iplayer.
His remit was as follows...
"Business dragon Theo Paphitis asks if the banks and the government are doing enough to help Britain's 4.7 million small businesses survive the recession... Are Britain's small firms are getting credit where it's due?"
Theo certainly had a good pop at the banks and the government... but there was a more important, fundamental point that needs to be re-iterated. We talk about this at just about all my events, and it is certainly featured in the new book.
Put simply, profitable businesses will go bust, and as Theo suggested, they do go bust! And the reason... CASH-FLOW is the big issue right now.
Starved of cash you cannot pay for raw materials, invest in new kit, do the R&D or pay the wages. In a world where (usually the large) customers are screwing you on your terms , the sums do not add up.
I am amazed at the following situations we have recently been told about:
- a £2m turnover manufacturing business with no cash-flow forecast
- a £1m turnover design company with no sales function or sales plan
- a £500k turnover service firm that has just been given a £2m contract but hasn't found funding to pay for the raw materials and is about to give up.
It is time to take action!
Last night's Panorama
Beating the Credit Crunch - the new book