Stop pre-packing and run your company properly
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AFTER READING about Bulmers Transport collapsing again (CM 10 February), I am annoyed about companies that have failed more than once, and we are hearing similar stories time and time again.
We are all hit with the same pressures in this business, so why do some companies fail and others prosper? It is down to how the companies are run and not external factors such as a lost contract or rising fuel costs.
During the recession, there seemed to be a lot of pre-packs happening under the guise of “company X has been bought out of administration in a pre-pack deal to the previous owners and has saved more than 50 jobs”.
If this company had not been saved, then the jobs and contracts would have gone to other companies that have been managed correctly, therefore rewarding its healthy management practices.
The current system seems to give people the attitude that if it all goes wrong, you can start again and give it another go.
I don’t understand how such businesses get funding from banks and inancial institutions given their previous record.
We spend a lot of time and money managing risk and insuring our debts, so if one of our clients hits dificulties, we do not follow them. We concentrate on the percentage of our business that each customer represents, so if we lose a contract, it will not be a catastrophic event.
We spend an equal amount of time and money investing in IT systems to keep our business unique and eficient in turbulent times. Some hauliers create unsustainable rates in the market, giving customers a false sense of cost.
We are often contacted by customers who have been left in the lurch when their transport partner went bust. When we quote them, we are not just slightly out, but a country mile out on what they have been paying. We are then told that the biggest thing they want from us is an assurance that we are inancially stable and will not cause their business disruption by collapsing in the future. However, they do not want to pay any more than they paid the failed company. Does this make sense?
Everyone has a choice of how they act and what they want from their company. I focus on working with customers who we get along with and can enjoy a partnership with.
I typed the word “pre-pack” into Google and got 42,100 results. Many of them were from accountancy irms advertising the “dream of writing off all your debts and starting again”.
I believe they should all be closed down as they encourage insolvency. The sooner bad management is penalised, and not rewarded, the better off we will all be. Peter Draper MD, Draper Distribution