The £700k Client: Part 2

Yesterday I told you about a client of mine. Seventeen years with one customer. Now owed seven hundred thousand pounds, and that customer’s seventy per cent of his turnover.

I still don’t know how this one ends. He rang me last Thursday. It’s live right now.

But I can tell you what I told him, and why a few professionals listening to this yesterday were probably shaking their heads.

Most people’s instinct, when someone owes them a fortune, is to go legal. Fair enough. But even that’s not as simple as it sounds. Get the wrong solicitor, one who doesn’t genuinely specialise in this, and a straightforward letter can drag on for months. Disputes appear from nowhere. It costs a fortune, and you’re no closer to the money.

If the debt’s completely undisputed, there’s a route straight to what I’d call the nuclear option, a winding-up petition. This really isn’t for the uninitiated. You need a specialist solicitor who knows exactly how and when to use it, and whether the circumstances are right in the first place.

Here’s what almost nobody tells you. The moment a petition’s advertised, the bank normally freezes the company’s account. Every other creditor finds out, and stops trading with them. And if the company actually goes down, into liquidation, your chances of ever seeing that money again are close to zero. You’d have won the argument and lost the seven hundred thousand pounds.

So the real skill isn’t the petition itself. It’s what happens the moment the other side genuinely understands what’s about to happen to them, the frozen account, the reputation, every supplier walking away. That’s usually when the conversation changes, and that’s where the money actually gets paid. Not the courtroom.

I cover all of this properly in the book, because it genuinely is my area. My only aim, every time, is putting the client first. That’s not always where a professional with other pressures on them ends up.

Do you need someone on your side? I’m Mark Smillie.