Cashflow is King!

This company had 831 staff, 18 sites, 8,000 customers and 30,000 delivery points. The administrators, Deloitte, confirmed that Waverley had been hit by a “reduction in trade credit available from a number of suppliers” with some understood to have reduced terms from 42 days to 28, and others pulling the plug completely.  As my eldest son, aged 19, said to me yesterday when I took him out to lunch in his university city, “most businesses that fail, fail due to cash-flow issues rather than profit and loss issues”.  He has got some good wisdom from somewhere – and I don’t think it is me this time!

This brings me back to my subject two weeks ago, when I was talking about our cashflow challenges.  Hilariously one of our suppliers asked my financial controller, Nikki, whether she had written that particular blog on my behalf.  She replied that she didn’t think Paul needed help on putting his point across!  Last time I mentioned that we had a proposed loan out on a funding web-site.  Well it all worked, and the money should hit our bank account tomorrow.  The web-site I will now reveal iswww.fundingcircle.com through which we have borrowed three times what the bank would lend us at 9% interest, which I don’t think is too shabby at all.  For the around 150-200 ( I haven’t counted) lenders this clearly represents a great low-risk investment and they are getting a good interest rate.  Funding Circle charged 2% of the loan as a fee – a necessary evil.  Definitely worth a look at the web-site if you want to borrow to get some return on excess cash.

Trade is very, very brisk at present due to all the pre-ordered Christmas orders going out and the all-year-round business is holding up well due to two glorious weekends.  It’s better than the summer weekends for some retailers.  There is certainly a lot going on and present, and I am very excited about the next few weeks, which are the busiest of the year plus our 2013 range is being finalised and we will have some absolute gems to reveal in the New Year.  As part of putting the finishing touches to that range, Louise, my buyer, and I will be at SIAL next weekend until Wednesday which includes dinner on Tuesday night with Pierre Cardin.  I have been trying to calm her down ever since we got invited.

Off to Harrogate in a minute to take care of a few things in the northern part of our operation.  Whatever this week brings for you – have a good one!