Keep an eye on your suppliers
Business is tough at the best of times but during periods of economic difficulties there is the added risk that one of your suppliers may fail and leave your business with continuity issues. So it is important to regularly monitor your suppliers and if a problem is building up, then you have time to look and find alternatives
It may seem a bit of a faff to check suppliers all the time, but I recommend at least checking once per year all suppliers, and key suppliers 2 or 4 times a year depending on how critical they are to your business.
The sort of things to check for:-
- Negative Net Worth - ie more liabilities than assets
- Directors who have a history of failed / insolvencies
- Sales falling rather than rising
- Profits reducing or losses growing
- Even Profitable companies fail due to cash flow issues, so look at the size of borrowing in comparison to the size of the Balance Sheet.
- There are many credit agencies out there that charge for all of this such as Experian or Equifax and of course Dunn and Bradstreet.
Instead I recommend using a free service such as the one provided by Reporting Accounts these are a new start up venture but are backed by experienced people.
The great thing I like about their service is that it is FREE!
Hope you enjoyed this mini site - I am getting into building sites at the moment and these are a sort of practice run!