Another Celebrity Chef in the Stew

SouthCoast

I recall reading something like:
Turnover is vanity.
Profit is fact.

Update:
This makes sense:

Turnover is vanity.
Profit is sanity.

Oblivion

Conrad wrote: »

I dont' know about you, but I find it hard to tell who is booming and who isn't.

As an analogy, some big finance brokers have gone under, and they were the very ones that wne t out of thier way to broadcast thier omnipotence.

I used to be quite high up in a national broker and was always struck that the top performers were invariably quite quiet, even slightly off beam individuals, which contrasted quite starkly against those full of noise and wind that did not consistently deliver high numbers.

Ah yes, the dichotomy of flatulence or affluence. I suspect quite a few former bankers will be contributing to the methane output right now :rolleyes:

Dave.

Thrugelmir

Kev09 wrote: »

I think we have a different idea of booming, I consider booming to be about increased cash and profits, not turnover. Anyone could drastically increase activity and turnover by selling stuff at cost! but that would be nuts!

I think Conrad is on to something with, ive known a few guys who for them it was just about having the big X5's and corporate at the footie, they didn't have a clue about how to run a business, these are the first to go in a recession!

By increasing turnover, profitability should also increase, however turning that into a positive cash balance takes longer. (I'm assuming that you are refering to a commercial business that gives credit terms to customers not a restaurant or cash retail business).

Just imagine you are paid your salary 2 calender months later than you normally receive it. You still have to pay bills, buy food, pay travel costs to continue getting to work. You've no income so you approach a bank. Against the £1000 your owed they'll advance you £800. When you finally get paid, your repay the bank and have £200 "profit" to spend. This is how business works. Until such time as a Company is totally cash generative of which I've known a few in my working life.

Kev09

Thrugelmir wrote: »

By increasing turnover, profitability should also increase, however turning that into a positive cash balance takes longer. (I'm assuming that you are refering to a commercial business that gives credit terms to customers not a restaurant or cash retail business).

Just imagine you are paid your salary 2 calender months later than you normally receive it. You still have to pay bills, buy food, pay travel costs to continue getting to work. You've no income so you approach a bank. Against the £1000 your owed they'll advance you £800. When you finally get paid, your repay the bank and have £200 "profit" to spend. This is how business works. Until such time as a Company is totally cash generative of which I've known a few in my working life.

Trust me I understand this glaringly obvious premise, but what it is you are describing is what should happen at the start of a companies life (I borrowed a bit to start my first company) a bit down the line the previous credit you have given will be coming in, what you are describing is factoring debt, I get it! I don't believe a company should be so hard up for cash that it needs to do this, maybe you could consider that perhaps this is not the best way to operate a business, the people that rely heavily on the banks will fold, I deal with companies who factor their debt and they are the ones that are skint!!!!!!!!

fc123

Whilst I have sympathy for Alan M's situation, it's hard to comment as we are not sat there with all the facts and figures laid out.


Purely based on my own experience over a couple of decades, I now believe that access to a lot of credit doesn't really help a business in a spot. It definately doesn't solve problems.

A small amount can be useful now and again BUT, from my own experience, I would say that having access to a lot of credit can end up masking core problems. Those problems rise to the surface eventually anyway.....so best get them sorted at the beginning of the crunch period. (By crunch, I mean, all businesses get crunch points at some point, regardless of the economic situation).


I had a situation 5 years back that I solved with access to borrowing. Now I have a ''Phd in Hindsight'', I can look back and conclude that what I was trying to prop up should have been handled in a different way.

In the end, I had to do what needed to be done regardless, so the end result ended up the same. Likewise, OH took on a contract that he should have either, not done (as he didn't have adequate cashflow for it) or done in a way that the cashflow was managed in a better way. The easy access to credit made it seem OK.......but it ended up as an expensive disaster.

My only excuse is that during the 90's, it was really hard to borrow any money, so when the time came to being able to do so (about 2001), it seemed the right thing to do.


My own business situation is very different right now, and unfortunately, I can't post details as yet, but one part is sinking and a seperate part is kicking. We have to take action ASAP before the sinking bit takes down the kicking bit.
In our situation, having savings are quite irrelevant as, the amount needed would end up never, ever being enough.
The problem is deeper than a drop in T/O and increase in overhead. It's a 'changing times' scenario. I am quite glad that we have no access to borrowing (tho', I think we could access sub prime stuff if we really wanted to) as it would delay the decisions we have to make.

Our kicking business has got itself 'cash forward' now and it has been really hard to get it to that point, but the strategy is now paying off. It owes hardly anything and finances it's product about 10 weeks before getting paid.

It's only my own scenario, but I have done a lot of risky stuff on a wing and a prayer over 22 years......getting cash positive is the only way for me now.

fc123

New_Gold_Dream wrote: »

Top post from a top poster.

Why thank you sir :A . In Real Life I scream and rant and cry about the situation.....but here, in the calm of MSE Land, I can write it out....and it feels better.

Kev09

fc123 wrote: »

Whilst I have sympathy for Alan M's situation, it's hard to comment as we are not sat there with all the facts and figures laid out.


Purely based on my own experience over a couple of decades, I now believe that access to a lot of credit doesn't really help a business in a spot. It definately doesn't solve problems.

A small amount can be useful now and again BUT, from my own experience, I would say that having access to a lot of credit can end up masking core problems. Those problems rise to the surface eventually anyway.....so best get them sorted at the beginning of the crunch period. (By crunch, I mean, all businesses get crunch points at some point, regardless of the economic situation).


I had a situation 5 years back that I solved with access to borrowing. Now I have a ''Phd in Hindsight'', I can look back and conclude that what I was trying to prop up should have been handled in a different way.

In the end, I had to do what needed to be done regardless, so the end result ended up the same. Likewise, OH took on a contract that he should have either, not done (as he didn't have adequate cashflow for it) or done in a way that the cashflow was managed in a better way. The easy access to credit made it seem OK.......but it ended up as an expensive disaster.

My only excuse is that during the 90's, it was really hard to borrow any money, so when the time came to being able to do so (about 2001), it seemed the right thing to do.


My own business situation is very different right now, and unfortunately, I can't post details as yet, but one part is sinking and a seperate part is kicking. We have to take action ASAP before the sinking bit takes down the kicking bit.
In our situation, having savings are quite irrelevant as, the amount needed would end up never, ever being enough.
The problem is deeper than a drop in T/O and increase in overhead. It's a 'changing times' scenario. I am quite glad that we have no access to borrowing (tho', I think we could access sub prime stuff if we really wanted to) as it would delay the decisions we have to make.

Our kicking business has got itself 'cash forward' now and it has been really hard to get it to that point, but the strategy is now paying off. It owes hardly anything and finances it's product about 10 weeks before getting paid.

It's only my own scenario, but I have done a lot of risky stuff on a wing and a prayer over 22 years......getting cash positive is the only way for me now.

Good luck, hope it all works out for you
I have been in business 5 years so maybe I should stop being such a know it all as things can all change very fast and ill likely be at the bank next week looking for the foldey stuff!!!

Alan_M_2

I'd just spent 15 minutes typing where we'd come from and how I ended up where I am now (and deleted it)....I suddenly realised that the only reason I'm doing this is to vent frustration at LloydsTSB.......sure, credit crunch, exchange rates...we have no control over these things and even with the benefit of hindsight there's nothing I could have (or would have) done differently.

But I have a huge problem with the incompetance of LloydsTSB in the daily simple operation of their business which happens with such regularity it's mind boggling. The regularity with which they lose paperwork and fail to deliver even the most simple thing is astonishing.

I'll save that for another thread.......

fc123

Alan_M wrote: »

I'd just spent 15 minutes typing where we'd come from and how I ended up where I am now (and deleted it)....I suddenly realised that the only reason I'm doing this is to vent frustration at LloydsTSB.......sure, credit crunch, exchange rates...we have no control over these things and even with the benefit of hindsight there's nothing I could have (or would have) done differently.

But I have a huge problem with the incompetance of LloydsTSB in the daily simple operation of their business which happens with such regularity it's mind boggling. The regularity with which they lose paperwork and fail to deliver even the most simple thing is astonishing.

I'll save that for another thread.......

Still feels better writing it out though...even if you delete it after .

We have been number crunching the past few weeks and putting various scenarios into the sums. A chunk of our problems have been caused by situations/people/things way out of our control......and I have finally accepted the rubbish stuff that I cannot possibly change (but can have the odd rant about over here late at night).

This cleared the way for the making decisions over the things I can change...and it's going to be really hard going through with it all....but then I look at the figs and know that it is the only solution.

I wish you well Alan....we were with Lloyds during the 90's and they were cr4p. We once had the small biz mngr down (fresh from the Lloyds school of business theory) who couldn't get her head around what we did. She stood there surrounded by 5 tonnes of vintage clothing.
I showed her an order being sent to Japan bla bla and she stood there, clad in High St Polyester and said '' Who on earth buys this stuff?''. She refused to believe that we could T/0 about £400k pa on what I showed her. She also didn't believe that Japan paid us so much per item as she said that the country was 'broke'. This was mid 90's.

Thereafter, she was really difficult, a few times 'phoning my OH to ask about large sums going into the account. I think she had had a class on money laundering and was convinced we were up to something.....perhaps she got a prize if she caught someone?

Anyway, I hope you do find a solution.......I will post in a few weeks our end result.

SouthCoast

Please keep us updated fc123 and............................

Good Luck.