Tuesday, 26 August 2008

The King of Cash

Nick’s secretary Gemma has finally come back from her two week holiday, and bursts into his office just when he was beginning his second, much needed cup of coffee, brandishing red bills from suppliers. ‘These bills are due ages ago! They need paying or I’ll get them yelling at me down the phone. How come my cover didn’t organise this?’ she whines. Nick can feel his lips tightening slightly – surely the suppliers can wait another few days? He thinks to himself - ‘It’s not like we haven’t spent enough money with them recently. Though a cheque does take 5 days to clear, so perhaps it’ll be ok. That big customer who wasn’t in last time I called is supposed to be paying us tomorrow’.

He open his now rather parched mouth to placate her and tell her he’ll sign some cheques today, could she please just go and find the chequebook? But the telephone rings. Nick’s long suffering wife bought him a telephone in pillarbox red, which flashes when it rings. At the time he found it hilarious, and she had just smiled knowingly. Unfortunately these days it is worryingly appropriate, and he has a better idea of what that smile meant.

‘Good morning mate!’ says the voice on the other end of the line. Nick relaxes and leans back in his chair – it’s Vic, his long-term business pal, who has been a great customer for over ten years. After the morning he’s had so far, it’ll be great to have a moan about the industry for a bit. Nick pick up a pen and starts twirling it around his fingers absent-mindedly.

‘Sorry I’ve not been in touch for ages- you know how things are at the moment- busy running around in circles after my creditors!’ Nick nods and agrees, rolling his chair from side to side, pleased that he is warming up to what must be a good bit of gossip to make him feel a little better, perhaps something juicy on how badly the competiton is doing?

‘Tell me about it mate’ he enthuses, ‘Chasing customers eh? I’ve had two weeks of trying to get hold of people, and everyone seems to be on holiday, including my Gemma who normally does the calling. She’s so much better on the phone than I am. I can’t do the tough-guy act on my customers – it’d ruin the image I’m trying to build!’

‘Too true’ Vic commiserates. ‘you’re too nice to some of them. Has anything happened with that big contract that made up that ridiculous dispute to get out of paying you?’

Nick’s pen-twirling hits a knuckle and flips onto the floor and skids to a halt in the dust underneath the filing cabinet. The business mobile phone starts ringing, setting off a ringtone of his children laughing and singing their favourite TV tune. ‘Er, er, hang on a minute,’ he stutters, ‘good to hear from you mate – can I call you back?’

Vic suddenly has a tone of urgency in his voice, and begins talking uncharacteristically fast. ‘Well actually I was just really quickly phoning to ask a little favour…. You know how I’ve been chasing my customers, well, I’m having a bit of a cash flow struggle at the moment… would it be ok to put off our payment for another week or so?’

Nick blinks as the mobile phone stops ringing, but there is shouting in the office – Gemma’s probably on the phone to the suppliers again to sort out the bills. She doesn’t half give them some. He cringes slightly, imagining their faces the next time he places an order – he wishes sometimes she wasn’t quite so assertive!

‘Mate, I’ll have to get back to you, that was the bank. I’ll check out my figures and let you know- you know I’ll do whatever I can, but things are getting a bit tight here too’.

‘No probs mate, I’ll call you later then’ and Vic hangs up, before Nick can tell him he’ll be in meetings all afternoon.

A timid knock on the door brings Nick back to the moment, and the new lad pokes his head round the door. What was his name again? ‘Two people have just come into the showroom, boss. They want to talk to you about setting up credit terms? They’re going on about a big contract. Are there any forms I can give them until you’re ready to speak to them?’ Knowing that he meant to create those forms ages ago – it certainly would have made things simpler!- Nick hurriedly leaves his comfy chair and still steaming coffee and grabs his suit jacket. ‘Nope, don’t worry, thanks for the tip off, I’ll go and talk to them now’. He sweeps out of his office in an entirely contrived air of authority, leaving the new boy still proffering a notepad and pen in his wake, wondering what the bank wanted and if he can afford extending credit to any more customers……

Ever felt like events are out of your control? Be they economic factors or finding how much your business partner has spent on the company credit card, money matters often take on a life of their own. So much so that over a third of small- to medium- sized businesses claim problems with cash flow are the main reason for their business failing in the first 3 years.

All too often, a business story can end up more like a Lewis Carroll story: "No, no!" said the Queen. "Sentence first - verdict afterwards!". (Alice in Wonderland). So many businesses look back and can see exactly where they went wrong, but had no idea at the time. By the time it has become clear they are already paying their penance, be it bad debt, huge loans, or even a failed business.

If any of this sounds familiar, the constant pressures, worries and confidence around managing your customers and cash flow, log in to the next instalment to see how Nick gets himself out of it!