The £700k Client: Part 1

When a client stops paying you, you assume the worst. Cash flow. Money trouble. Real difficulty.

Sometimes that’s true. Sometimes it isn’t.

Sometimes a company can pay you perfectly well. They’re just choosing not to be in any rush about it.

Last Thursday I took a call from a client. Turnover, five and a half to six million a year. Seventeen years with one customer, his biggest by far. About a year ago, that customer got taken over by a much bigger company. New people. New systems. A different attitude to paying its bills.

Payments started drifting. Drifting became excuses. Excuses became silence.

He’s now owed seven hundred thousand pounds. From a customer that’s seventy per cent of his turnover.

I could hear it on the phone. He wasn’t sleeping. If you’ve ever lain awake at three in the morning worrying about your business, you’ll know exactly what that sounds like.

Here’s the part that should worry every director listening. It isn’t that the customer can’t pay. It’s that they’ve worked out there’s no real cost to being slow. And when a company’s desperate for work, most are right now, they don’t look closely enough at who they’re taking on. They just take it.

You might know me as a business finance broker. What you might not know is that for thirty years, I’ve been advising businesses through exactly this kind of situation. Debt. Distress. Decisions that matter. That’s the hat I had on last Thursday.

Before I tell you what I actually did, understand this about how I think. My focus is purely on him. Nothing else. The client always comes first, and keeping his business standing.

Tomorrow, I’ll tell you exactly what that meant. And I should warn you now, there are a few professionals listening to this who aren’t going to like it much.

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