Takeovers, Takedowns and Meltdowns.

Takeovers, Takedowns and Meltdowns.

I woke up this morning with my mind on an old customer whose story I would like to share.  I don’t wish to name names, so, as it amuses me, I will call them Dave, Ed & Nick LLP.   They were a customer for the best part of a decade.  I personally looked after their account and every other day would be talking to their excellent general manager John who ran the show for the owners, taking his orders, sorting out his problems, make sure his supplies and equipment arrived when he wanted them where he wanted them, keeping him happy.  A wonderful chap, an expert (yes, I know expertise is so last year), keeping his employer’s ship on a steady course for many years.  John knew what he was doing.   Sometimes he dropped a clanger or would make totally unreasonable demands and I would be swearing and muttering to myself around the office as I tried to figure out a solution that would get him out of a fix.  I always did and often it cost us money and he wasn’t always as grateful as I would have liked, but he always paid the bills and gave a fair price. Our working relationship was both excellent and mutually beneficial.

Then out of the blue the Dave, Ed & Nick LLP partners all wanted to retire and sell up.  John decided to go to pastures new and his assistant, Ben was put in his place.  We were assured there would be no change, we would have the exact same benefits and relationship with the new permutation of the company.  Of course, the inevitable unravelling started quickly.  The calls from Ben were full of unspoken anxiety and stress, you could almost feel him shrinking in the middle of the circle of wagons as he came under siege.   Their accounts department dragged their feet, Ben’s budget was squeezed, customers started to leave them in droves.  I would have to stop supplies until invoices were paid, never happened before.   It turned out that the new owners were not interested in job creation, or investing for growth, they were not interested in the existing staff or the long history of the company.  They had used lies to keep staff on board.  The prize in their sights was the prime property the company owned which was right in the middle of an area of intense redevelopment for buy to let luxury apartments.    They were running the company down for the cashflow whilst they got a developer on board, which they did.  Within a year the company which had operated for 30 years was dead, redundancy notices handed out.  The plaque on the swish new apartments should read RIP Dave, Ed & Nick LLP you served us well but well, we couldn't be bothered with all that work malarkey and besides we made more money this way.

Why do I tell you this story you ask?  An everyday story of business surely.  Well I am no politician or historian, so I see the world through the lens of everyday life.  I see a parallel in the current body politic. Like my customer it has been broken and taken over by asset strippers and opportunists, people who have leveraged populism to take control.  I am shocked by what has happened in the last 8 years.  The electorate sold its votes to the highest bidders, fed up with stagnant wage growth and self-serving over familiar plastic politicians.  Conservatives under David Cameron bowed to pressure from the extremes within and sold their Tory souls to the UKIP agenda of division and blaming the Other to deflect from the fact that their own policies were woefully inadequate in addressing the post 2008 climate of poor growth and financial crisis.  Now under the cosh of a referendum result which she knows is damaging and makes no sense, May is caught in the death grip of the ERG who are pushing us steadily towards a disastrous Brexit.  The Tory back benchers, mostly remain realists originally, are invested so heavily in the folly of the great Willerthepeople Project that they are refusing to acknowledge we are all at the mercy of a small number of Billionaire disaster capitalists who are pushing their Brexit agenda for personal benefits, the acquisition of money and power, at the expense of millions of people around the country.  These people count their pounds, euros and dollars, whilst most of us will count the cost in pounds, in tax burden, in family lives, in jobs, in closed businesses, in lost family and friends from the EU27 community who are fed up of being depicted by press and politicians alike as a problem rather than a part of our community.  Look at Jacob Rees Mogg talking about the Northern Ireland Border.  He cares not a jot for the ordinary people of the United Kingdom.   Nor does Boris Johnson who has dodged and wavered and lied and twisted direction.  Who would trust him? These people are not our friends, yet they hover malevolently in the background threatening May’s leadership to get their way. 

But what of the HM opposition you ask?  They got a shiny new management too and the launch party was indeed super exciting and remarkable.  People were swept up in the fever of enthusiasm of a new (to them) face who appeared to be speaking so plainly and selling his politics of hope and simple solutions.

Beware though, they are gambling with the Politics of Catastrophe as much as the government is.  They have consistently failed to point out to their constituents what a damaging thing Brexit is.  Most of their supporters know and can see that but these are politically engaged individuals.  The average constituent has no idea and barely an interest in what is in store. The correct responsible response to the referendum result would have been to press for a thorough review of what the result meant, what would be the consequences and if necessary some consensus as to what a desired realistic endpoint to aim towards if it was decided by parliament to trigger the A50. Yet the shadow front bench sat back and let it all happen.  Totally blind, totally clueless they supported the government in triggering the A50.    When challenged they wring their hands.  What can we do?  We have 6 tests.  Will of the People.  Honour the referendum.  We have no say.  Well the six tests have already failed under any kind of Brexit so what now?   What are they doing?  Are they waiting for government to fail and pick up an election win and possibly an opportunity to bring in their own Corbynomics agenda?   

Lib Dems, Greens, SNP, all fully anti Brexit but unless we live in Scotland it’s difficult to feel our remaining options will get us very far, especially given the continuing hostility shown towards the Lib Dems by Labour and their refusal to work together with them effectively against the government on Brexit.  Perhaps we should all move to Scotland.

Young people have been shafted so much by Tories  they will not be joining any time soon in big numbers.  Labour membership Is at healthy levels, but the writing was on the wall for me personally during the 2015 leadership election.  I saw long and frequent threads on Twitter and Facebook filled with vitriolic diatribes towards Yvette Cooper and Liz Kendall and a little to Andy Burnham.  Liz got the worst of the abuse.  This was from so called labour members and supporters.  I see some of the same twitter accounts to this day in nasty aggressive threads about anti-Semitism or Brexit telling people to go away and vote tory and how they are responsible for people dying at the hands of Tories by being critical of labour strategies.  I left Labour because of Brexit, but to be honest I heaved a big sigh of relief that I no longer have to be embroiled in these kinds of internal discussions.  They started the tone with this level of aggression towards dissenters and are surprised that it has now come back to bite them in a very public meltdown being covered in the news.  The internal language of labour is now toxic to its core.  I don’t think I am the only one who has been totally turned off by this nonsense.

The Body Politic is broken.  All parliamentarians have contributed to this either by their actions or inaction and it is parliamentarians who must fix it.  New alliances between sensible minded MPs and Peers and MEPs REGARDLESS OF PARTY who believe in doing the right thing need to be forged using their agreement on the Brexit issue to try and defeat these extremes who between them are driving us to the disastrous consequences outside the EU as a third country.  But it’s not just about Brexit, these alliances must push back against the wider implications of these extremes which are creating a political landscape of intolerance, where debate has been replaced by gaslighting and dog whistles and the abdication of personal responsibility.

All I can do is raise my one voice to MPs and potential MPs and say very clearly whoever wants my vote in the future will have to prove to me they have earned it by showing the courage and good sense in standing up right now against this disastrous attempted takeover of UK Plc by ideologues, fools and Wreckers.

I hope you will all use your voices too.

@redalphababe

A Life in Business, Tomb Raider and Brexit

I sometimes think a life in business is like playing Tomb Raider.  It’s a strange analogy, I know.  Having spent more hours than I should have sneaking onto my son’s computer in the noughties there are some similarities so bear with me whilst I try to explain my logic.

When you start, the first couple of levels seem easy.  You are well signposted, there are plenty of instructions, there’s lots of information available to guide you and give you some clues about which direction to explore in.  You can, if you have been cautious, afford a few false starts before you have fully committed yourself heart and soul into the game ahead.  Most importantly, you get a huge buzz out of every problem you solve and feel happy as you work your way up, around and through and over all the obstacles towards your goal.

It’s not long before you get on to the harder levels.  There are fewer pointers here. You have an idea of where you want to go but in the words of Oasis, “all the roads we have to walk are winding, and all the lights that lead us there are blinding “.   Every new level brings with it unfamiliar territory. The problems are harder to solve, the obstacles trickier. There are sabre toothed tigers and baddies with pistols around the corner threatening to end your game. Along the way you acquire new skills and weapons.  You make mistakes you lose a life you try again having learned from your mistakes.  But here is where the analogy departs for a while because suddenly your business is your life, it has become  almost your entire life and now you are immersed the consequences of the decisions you must make are very real.   

I am not an academic or an expert or an economist.  All I can offer are my personal thoughts having been a co-director of a small business for 20 years.  In fact, I have been involved in small businesses since I left university in the late 80s.  During all those years we have seen many things. I have experienced dealing with bailiffs at the door and conversely been in the fortunate position of being able to help when others were at a similar low point. There have been times when we had to sell everything we could to help us through cash flow squeezes or borrowed heavily on credit cards to make month end and times when making money was easy and we have been able to happily reinvest in the business to expand and move it forward.  We have had the privilege of building a team of people who do their best for us every day. We have been able to borrow to invest and taken many risks and chances, always calculated but sometimes dicey even so.  Some paid off some did not.  This is life. We make decisions, some are right, some are wrong, some work out, some not so much.  Just as in a computer game though, we only have so many business lives.  Unlike Lara, we can’t reboot and replay the game once all our chances have gone. 

 

Summary of stats on business numbers from Briefing paper number 06152,
28 December 2017 Business Statistics, House of Commons Library

Here is the thing I have learned.  However stable a business is, nearly all companies are really only 3 to 6 months away from annihilation.  From time to time paperwork will cross my desk from a liquidator winding up a customer or supplier and I always notice the same thing.  The implosion after the crisis point is pretty dramatic and rapid.  

There are several reasons why a crisis can occur.  Bang - a change in government policy.  Slap - a loss of an important contract. Biff  - the most profitable product is now out of fashion.  Punch - a miscalculation of stock.  Crash - a sudden dramatic move in currency exchange rates. Kick - a rise in interest rates when over-borrowed.  Zap - a stupid misjudgement on an expansion plan.  

This is not an exhaustive list but any of these things can happen to any SME with fatal consequences for their business.  The liquidators move in.  Suppliers switch to self-protect mode.  All the value everyone thought was there ebbs away and dissipates like Lara’s energy bar, as the customer base drifts off to competitors, stock is marked down, customers find reasons not to pay their outstanding bills and the accountants and bankers who make their living out of the dead bones of SMEs take their cut.  Long standing contacts distance themselves uncomfortably, embarrassed to admit a superstitious fear that failure could be catching.   I look at the updates from these liquidators and I shake my head with sorrow as it could be any of us.  I doubt I am the only one who sees it this way. 

So you see, the life of a small business is  fragile.  We plan, we build reserves, we look at the prevailing conditions, the things out of our control, and we try to make sensible decisions, we hedge against our vulnerabilities where we can, we look for opportunities to get ahead and hope they pay off.  Here is where I come around in a roundabout way to Brexit.  The fragility of SMEs means we are heading for some extremely difficult times with Brexit looming. Remember my list of potential obstacles?  Well for a proportion of the 5.7million SMEs and even some of the large businesses, Brexit, any flavour of Brexit on the menu, will mete out a number of those blows simultaneously.  The companies affected won’t so much be rolling with the punches as knocked unconscious before they have had a chance to even buy gloves.  We could do some contingency planning, we are doing what we can, but when there is a finite amount of time and resource and personnel we need to know roughly what we are planning for otherwise we may as well just buy a lottery ticket.  

If you voted Leave, you - yes I do mean each and every one of you -  have helped to put my business in harm’s way, but not just mine.  A great many SMEs will face existential challenges because of a direct effect on their EU sales, disruption in the supply chain, an increase in their input costs or less directly because of a downturn, which will most definitely come, leading to cuts in their customers spending in the short to medium term.  2 years on and I still have not seen a convincing reason which explains why we are voluntarily following this insane path.  There is no benefit to me and mine, my staff or my business and after asking the question multiple times, nobody credible has ever been able to cite a specific example of a benefit to my business or my life.

My partner and I are both from working class backgrounds, we started out with no contacts and no capital but lots of bravado.  Over the years we have adapted, diversified  and changed our business model to suit changing business environments.  We have battled and fought and sought the tenacity we needed to keep ourselves in the game.  We have reinvested our profits, taken chances, learned from our errors, some of them bad ones.  Some days I look at the uncertainties ahead and the idea of giving up, selling what we can and going away somewhere regardless of the consequences crosses my mind for a moment.  But I know we are not quitters and we will fight on, one problem at a time, one obstacle at a time.  

For many in business however, Brexit might just become like one of the nightmarish corridors in Tomb Raider Level 20 with the jets of fire, a sword of Damocles and a giant boulder rolling behind.   There will be too many obstacles coming together in too short a time to negotiate successfully and no amount of stockpiled medi-packs will get us through to the next level.  Don't be surprised if some players decide to just quietly turn the computer off and take up yoga.  

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Why I am voting #Remain - my positive case

I think more than enough vile and false information has been splashed about with regards to issues around immigration in this campaign and anybody who has believed some of the the most horrible rhetoric is not going to be swayed in any way by me so I'm not going there. Instead I have decided to lay out MY POSITIVE REASONS for voting to REMAIN A MEMBER OF THE EUROPEAN UNION. 

We have all benefited from some aspect of EU membership over the years

Business and jobs from free trade – Just in our little business I would say about 1.5 of the 12 full time jobs our business supports is down to the turnover and PROFIT from our sales into the EU. We do not concentrate on export but nevertheless it has become a valuable income stream and is growing. If the terms of trading into the EU change and it affects profitability of this business we would be left with no choice but to make some changes to protect our core business activities. Or put it another way have been able to create 1.5 more jobs than we would have done otherwise thanks to our EU sales. 

EU funding of social/ cultural/community projects – Lots of parts of the UK have amazing resources thanks to EU funding.  Parts of Wales have really benefited from this and I believe Wales is a net beneficiary.

Infrastructure that would not otherwise be built due to limited resources from Westminster/local authorities – see my last point

It is easy for every single one of us as EU citizens to travel study work and invest throughout the EU and this has broadened minds & enhanced cultural and employment opportunities for young and old alike.

EU structures have enabled more funding and more importantly information sharing and cooperation in the vital areas of science, the environment and security.

Consumer protections and employment protections have been enhanced for each and every one of us. Whether you buy a product in Britain or France or Germany you have the same consumer legislation to protect you. For example I have to give exactly the same returns rights to our British French German or Spanish customers.  Vice verse if you buy from a French retailer. 

Yes regulations can be a pain and there should be a constant revision of removal of regulation that has not achieved the intended aim (apparently this does actually happen in the EU)  but in the main the original intentions are to help EU citizens. Do you really particularly want to choose to buy a hoover with an inefficient motor or would you prefer there is legislation which ensures that manufacturers continue to invest in the technology which drives their designs forward and makes their products more efficient and effective? Maybe some of those regulations are a means to getting us in the right travel of direction towards a worthy goal.

On a final and  personal note re regulation, people (both politicians and other folk)  who have never in their lives run a business or created ONE single job have spent the last few weeks telling me solemnly that small business in particular is hampered by EU regulation.  I have been running a small business for 26 years and we have created an amount of employment over the years which has generated much tax income for the UK that I think we can be quietly proud of.  I can say hand on heart I have never had any EU regulation hamper my business activities noticeably and any business problems we have experienced over the years have ABSOLUTELY NOTHING to do with EU regulations and more to do with how well the economy is doing combined with our decisions.  I cannot speak for others in business but in my company we believe in taking responsibility for the quality of our own work, decisions and judgement.  We try and deal with trading conditions as they are presented to us we do our best we don’t always get it right but we won’t blame anybody or anything else when we get it wrong.  

So that's where I am - that's why I sent my postal vote in a week ago and proudly voted to #remain.  I hope you find something useful  in my humble opinions.