Wednesday, November 16, 2005

Worse than sex

Not many great posts today I fear. I've got to go into work.

Once a month we produce our management accounts. Usually around the fifteenth to allow all the suppliers' invoices to come in.

Last night when I looked at the draft figures it became apparent that two of our main companies had run up losses. If you want to know what stress is, it's when you see red ink in your management accounts. The room swam and I nearly passed out. Seriously.

Our most profitable business had a bad month because of a glitch in orders from its two main customers. Hopefully, this is a one-off. The other company is more problematic. It's going through a period of restructuring but the results are still to show through and we don't really understand why. And if you don't understand what's going wrong in your business it's hard to put it right.

Of course, these being small companies the problems are exacerbated. Time works differently when you're small a small company. It accelerates. When things go wrong you have a lot less time to put things right compared to a big company.

Big companies make mistakes all the time and lose millions and carry on regardless. You don't have that luxury in a small company. Your balance sheet is so tiny there is no margin for error. One mistake can wipe you out.

Don't let me put you off starting your own business though. When it goes well it's better than sex.

When it goes badly, it's still better than sex. Well, virtually anything is at my age.

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