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TIME TO CHECK THE FOUNDATIONS
Page 3
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It seems a worrying trend. First Courts, then Allders, The Gadget Shop and now Index — all gone or going to the wall. If Napoleon was to be believed, we're a nation of shopkeepers and latterly we've become a nation of shoppers.
"Anyone engaged in business would be foolish to ignore these early signs"
Consumption, by popular belief, is what's driving the economy and the road transport industry has brought those consumer goods to a retail park near you.
We're worried, because the economy seems to have entered one of those cyclical culls where the weakest firms —those who were over-priced or poorly run, or had lost their place in a market moving to ever cheaper and faster revolving designs — can no longer survive. And every time one fails our industry is caught in the backd raft.
The modern road transport industry has thrived during this shift to a predominantly service economy and the stability that's been a flavour of the past 10 years. But, throw in the debacle that is Rover—clearly a basket case before BMW got involved never mind the Phoenix gang of four—and an impending interest rate rise after the general election and we see a trend emerging, which could mean troubled times ahead. With Rover alone thousands of people working in distribution, car transportation, component haulage and peripheral industries will lose income, if not their jobs.
Doom-mongering is not our natural forte, and it should be remembered that this is not a sign that the economy is spiralling into recession. Far from it. But anyone engaged in business would be foolish to ignore these early signs and take some actions to ensure their business is robust enough to withstand any economic hiccups. Are you watching the financial performance of your customers? Are you spreading your liabilities across a number of different sectors? Are you sufficiently diverse and flexible to cope if a major customer hits the rocks? If the answer is no to any of these questions, it's time to consider what steps you need to take to build some solid foundations for your company's future.