We find ourselves facing challenging economic conditions and they are not being made any easier by the rising number of companies going bust to avoid their debt and then starting up again the very next day with a different name and a clean bill of health.
Obviously there are companies that take the insolvency route because they’ve investigated all the available options and have chosen that particular way out of their current situation. At Venture Banners, we like to think we take the time build up a good rapport with our customers. We also like to think we offer a pretty unique service, so on the odd occasion when one of our trade customers does go pop, they will usually phone us and ask for our help, thus keeping the relationship intact. The end result is: the client gets to keep a valued supplier, while our financial exposure is minimised.
However, I am more interested in talking about the absolute scum that start a company, build up debt and then go bust only start up the next day with a slightly different name ( you know who you are, Apple Print.info), leaving their suppliers licking their wounds with little chance of getting any money back—the so-called Phoenix companies.
‘Phoenix’… sounds wonderful, doesn’t it? A magical mythical bird of fire, though the reality of Phoenix companies is anything but. While researching the subject, I was shocked to hear a story from a very large printing company that had a long-standing customer who went bust owing them thirty thousand pounds, only to phone the very next week with a new company name expecting the same trading and credit terms! Astonishingly naive.
The ripple effect of a company going bust can often be huge, creating cash flow issues and on occasion making the perfectly legitimate supplying company late in paying its own debts and finding its own credit score being adversely affected.
When we were knocked for £1,300 earlier this year (see above) I contacted the nastiest debt recovery people I could find: Shotgun, Knuckleduster and Blade Ltd… or something like that. Not becuase of the money, but the fact that the b***dards who had built up this debt were practically laughing down the phone at me, but do you know what, they were protected by law, so Shotgun, Knuckleduster and Blade Ltd could do nothing to help.
I personally don’t know how these people who Phoenix can sleep at night, very comfortably with our money in the bank probably. If you are one of these people who do the Pheonix thing I have some words of advice; You can’t run bath water, let alone a company, do us all a favour and find yourself a job, you’re obviously not an Entrepreneur.