By Jeremy Priestley, Managing Partner of The P&A
Partnership
and Managing Director of P&A Receivables Services
plc
As I sit penning this article for a mid 2006 review,
I cannot help but think how similar are the problems facing those
businesses with financial problems to the emerging problems of Great
Britain plc.
Here’s a typical scenario -
Company X has ineffective financial
controls, has spiralling costs and increasing indebtedness caused
by acquisition of expensive motor
vehicles and machinery financed off balance sheet. Manufacturing
costs rising faster than RPI and sales falling due to shifts in
the market and competition from the Far East and a downturn in High
Street
spending. The company is losing money. Directors are unable to
solve problems, don't listen to advice, fall out but continue
to draw high salaries. Banks ask for their money back and creditors
press for payment.
There seems to be some similar problems at Great
Britain plc - no
one will argue that there is overspending in some areas, that
public sector staff numbers and their costs and pensions have risen
out
of control, that the value of some IT applications is suspect,
that the economy is mortgage and credit card driven, that there
are question
marks over what exactly is the increase in the 'cost of
living',
that interest rates are increasing, that PFI costs should come
onto the balance sheet, that leaders seem to be falling out......
I
could go on - but this is not a political message, I
just question what kind of lead the 'Directors' of
Great Britain plc are giving. Businesses are going through
difficult
times in the
current benign economy; those businesses without the management
skills to take advantage of a changing market place, whether
that's
caused by shift in fashions, new markets, ability to source
low cost production - here or overseas - will find it
hard to succeed. The easy days are over!
I'm told that
every 26 minutes a foreign company establishes a new business
in China, and which, with India, is now starting to
dominate world trade. Just think about it!
If your business
is experiencing problems you should be speaking to your accountant,
and if you think you need more specific
advice about liquidity or turnaround problems please call
me on 0114
275 5033
< back to News headlines
