A client of ours with just under 50 staff and a history of profits who has had a bad couple of years.
Their product is a little dated and expensive and compared to the competition and they have been losing sales to them. Our team looked at their competition's accounts and saw what they were doing and even visited a trade show to see the product and they trounced our clients.
We advised our client that they should hedge currency - they buy from abroad and sell to the UK, he refused. He knew the currency markets, he made enough profit to not worry about it - well he did before his profits nosedived. In fact he often lost from currency transactions. His previous profits just hid the truth.
We advised that their stocks were too high. Their stock turn was 0.3 - it turned once every three years. The competition's turn was once every four months, we advised don't buy more stock - it's killing your cash flow and its expensive at the moment - remember - its costing you more to buy it as the pound is 20% lower than it was in December last year. He ignored us an spend hundreds of thousands on new stock. The new stuff he was buying in had no benefit, it was the same as the stuff he already had and customers buying from the competition.
He refused to look at the competitions product and even the advice of a specialist product consultant that could put him in touch with a Taiwanese design house that have turned around other client's products - and handed back the IP. After 5 years there is no evidence of them selling the design to others - but he doesn't trust them.
Every time we gave advice we were met with the same "I know my business, how dare you interfere!" or "Experts, what do you e***** know!"
On Monday, there were some strange transactions on the business' accounts and when we checked it was clear that management figures were made up in order to increase money from us. Clearly a breach of our terms and fraud.
When questioning the client he admitted that he had run out of money and could not pay wages and because of the fraud we can't help further and have to report him for financial crime.
What a crappy way to start Christmas!
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What a lucky guess that was...
Last edited by: sooty123 on Sat 24 Dec 16 at 12:44
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>> What a lucky guess that was...
>>
I would have put a bet on that as well!
In my experience, businesses run by a professional management team with experience of other companies and markets work best, even if there is family money in the background.
If the management team are given even a modest shareholding in the business, it is even better as they will stay a longer and have a real interest in how the firm does.
You can't beat a management team with different experiences. Avoid MD's who are sales men or operations directors. He should employ a good sales and operations director and concentrate on the business as a whole.
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When I was in business with four small retail shops, and max t/o approaching half a million ( yes, t/o is vanity) it was often difficult coming up with new ideas...my ex and I, who had a grounding in M & S management, had a staff suggestions box with decent rewards for 'new ideas' which worked out. Even if they didnt, it was always beneficial to run with their ideas for a short time, even if only to encourage them. If the staff ideas worked out, we rewarded them either financially or time off when convenient.
We took full advantage of local 'business advisors' spending a day or so in the shops. Normally provided free of charge by the various business forums of which we were members. Time with them was well spent. Merchandising ideas, till procedures, stock control, staff & customer interaction etc etc
We were always happy to listen to any advice, both good or bad
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I expect you know that the proper meaning of 'feck' in Ireland is to toss a coin. Not entirely inappropriate...
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>> I expect you know that the proper meaning of 'feck' in Ireland is to toss
>> a coin. Not entirely inappropriate...
>>
Will the mods allow it to stay? I am sure there was a time her when attempts to bypass the swear filter resulted in the whole thread disappearing.
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"I am sure there was a time her when attempts to bypass the swear filter... "
I have often wondered about the origin of the moniker "BrianByPass".
An anagram of "brain by-pass"?
An allusion to a medical procedure?
A reference to a re-routed main road? (Surely too obvious.)
Now we know. Devious wording of posts.
Last edited by: Focal Point on Sat 24 Dec 16 at 15:39
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Even though nobody except your client will know who you are talking about, I think it is unprofessional to post such details soon after the event and declare someone a fraud before they have been convicted.
>> management figures were made up in order to increase money from us.
>>
Is it your firm's money they have been using to stay afloat all these years pursuing a path to extinction, and yet have been able to ignore your advice?
In which case, I think the negligent party is your firm. The family firm have taken your firm for a ride.
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>>unprofessional
Its in the London Gazette so public knowledge. Details changed significantly so it would impossible to connect the two.
>>someone a fraud before they have been convicted. Admit should have used alleged fraud but they have admitted verbally to us that the figures were made up so its still a contract breach.
It'll never get to court. They rarely seem to from my experience.
>>Is it your firm's money they have been using to stay afloat all these years pursuing a path to extinction, and yet have been able to ignore your advice?
All banks are in the same boat. You can only advise very carefully as there is the risk of becoming a shadow director and liable. There are covenants that stayed within cover and it gets to a point where a lender looks at the assets and performance and says "if we pull the plug now, we will be repaid". Depending on the co-operation of the management, that plug may be pulled sooner or later, or never. We will be repaid, the family have assets, mortgage on the property, plant, stock (to be sold at a loss to the inflated book value) etc.
What grates is the time we have spent trying to save the business from themselves to no avail, though we charge for our time and the people that will really suffer are the staff!
Last edited by: zippy on Sat 24 Dec 16 at 16:03
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Feck The Experts - sooty123
