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Tuesday, 27 September 2011

Asset Stripping – Yes Please!

Ed Milliband is economically illiterate.

An enterprise fails because it has insufficient customers; or because it can't keep its costs under control.

Years ago I understood that: if you don't have a customer, you don't have a business. End of story! Almost (for you). You might have premises and "means of production" but if you can't make a profit – you can't pay your mortgage (and feed your children) out of the difference between what your customers pay you and the cost of running the business, you are stuffed.

I ran a business. Our measurement was "the tripod": How much do we owe? How much is owed to us? How much do we have in the bank? Tits up? It happens all the time: not enough customers, costs too high.

As it happens, we sold our business – to really nice guys who didn't understand the above. Heartbreak! They had to make our/their employees redundant. They didn't get the fact that: if you don't turn the sales handle, your business will fail. It did.

Getting sales isn't easy. When we did it ourselves, we did OK. When we employed people to do it, it sometimes worked. When our successors took their eyes off the ball, they failed.

Good night! When I return, I shall concern myself with failed enterprises.

1 comment:

  1. Chris

    Good comment. Totally agree. Millibean came across as being totally anti-business in his awful pitch. At least Blair was a performer (and very shrewd guy to boot!)

    Millibean's problem is that he, in common with most of our glorious parliamentary representatives, have never run a business, let alone been involved in one.

    So given his views on business, and having had a quadruple charisma bypass, it is a dead cert that he will never see the doors of Number 10 from the inside.