Run into the ground
About ten years ago, my friend and I inherited a rather well off business.

Whilst not thriving, it was in good shape and was only in need of a tweak here and there to keep things ticking along nicely. I was doing the accounts, my friend was CEO.

Of course, there were things we needed to change. Everyone who knew us could see the deal to take it over had been planned for a long time. Everyone was happy, and everyone was expecting things to get better. Well, we told them they would, and we didn't want to break our promises.

As I dug through the accounts, I noticed we were spending rather a lot on pencils. I immediately introduced a pledge that no more that forty percent of the company's profits would be spent on pencils. Most people were quite supportive, some said they preferred pens anyway; all of them started calling me the 'iron accountant', which I kinda liked at the time.

But then we found we really didn't know how to run a whole company. Luckily we had lots of friends, who had some friends, who's friends had helped out the previous guys on some minor projects. We gladly accepted their help, though grudgingly had to buy some more pencils for them to use at work. It was good help though, these guys really knew what they were doing, and it gave us lots of time off to take our families on holiday.

These friends spotted all kinds of things which we hadn't been doing, which would otherwise make the company fold any day, or at least have it bought out, and told us they had some other friends who could come and look after some parts of the company for us. Proper experts, they were. They wouldn't be cheap, and we might need to lose some of our in-house staff, but they were damn good.

They even had an idea to have them buy their own pencils, really decent pointy ones, as long as we paid for them over lots and lots of years. This was pure genius, as it meant I could still be the 'iron accountant' only spending my magic forty percent of our profits on pencils, whilst promising our friends around sixty percent over many, many years.

We got new computers throughout the office and were told that, for a price, we could even have the offices linked together by some kind of 'office network', increasing productivity and customer response times by a million, million percent. That was five years ago. I had a memo this morning telling me they'll be linked by next year, for definite this time. Then we'll show 'em.

The trouble is, this kind of thing meant we didn't really have much money to put in to other areas of our business. If only we'd had a look around before we started out and realised that to run a business profitably, you need to be prepared to get your hands dirty. Paying other people to do our jobs meant they got rich while we tried to look busy.

So we had to put our prices up. Only for our small customers. Our big customers wouldn't stand for it. In fact, we decided to totally do away with a lot of the checks we'd normally do on our big clients, to make sure they were using our products properly. They could do what they liked, it could only make us look better, and attract more custom, surely? Our smaller customers didn't have such a good time of it, naturally; we lost a lot over the years, as they found our prices too steep and the order forms too complex. They lost interest and found it easier and safer to buy through, and rely on, our larger customers.

Not that it mattered. Our larger customers got bigger in direct proportion to the number of small customers we lost, which was brillient. Less paperwork to deal with AND more money. We couldn't lose.

What we didn't realise was that it wasn't our money we were paying our friends with. It wasn't their money our customers were paying with. It also wasn't their customers' money.

So when one of our largest customers told us one day they couldn't pay a particularly large invoice, we took the usual steps, giving them notice, adding on interest, taking them out to dinner, wine, cigars to make them feel still wanted, even giving them a little handjob in the back of the taxi on the way home.

Then they told us how much debt they were in, how many of our products they were looking after. We had to offer some hefty rebates to avoid looking like we didn't know what we were doing. And bad we would look, as it turned out they had been selling on our products without the instruction manuals. Their salesmen weren't properly trained, like the smaller companies' staff were, and we hadn't been round for a cup of tea to find out how they were doing for ages.

Then we almost lost some other clients. That got really scary for a moment, and we had to take a good look at what we'd been doing, and work out how to get out of this hole.

I tell you, it's a lot harder to deal with losing one massive client than it is ten small ones. And now I'm CEO, I feel quite responsible. My friend's become a director of a local golf club and he doesn't much care for this company any more.

Whenever I ask my friends what to do - and I have no shortage now, though we're really starting to run low on pencils - they give good advice, but it still comes at a cost. I can't tell if its good advice any more, I just use it out of habit, I suppose.

And the friends I've put in charge of the company health insurance need new pencils too, to keep track of the scheme itself. Not that there's any money in the scheme, per se, but one day there will be. So I'm told, and all our employees will be rich.

Hopefully the price cuts we made yesterday will kick in soon, as a lot of our products are going mouldy on the shelves now. We just found out that the clients who ran out of money had to let go all their staff, which comprised almost a quarter of this company's customers, and our other customers are being a bit more thrifty now.

Who would have thought diversity was important or that my rather expensive friends' advice wasn't worth the pencils they wrote it with?

Boy, do I feel silly now.

Length? About seven years too long.
(MrOli is ugly, but in the morning you will be sober, Fri 28 Nov 2008, 14:17, 2 replies)

Applauds
...clicks
...cries
(ChaRleyTroniC is invincible with his chips and cheese, Fri 28 Nov 2008, 15:11, closed)

Took me
The first two sentences. But have a *click* anyway.
( MatJ LOOK, Sat 29 Nov 2008, 23:19, closed)