Will a lot of small domestic tree firms go bust?

[Mark Bolam]

I’m not against finance at all, but having everything on tick wouldn’t sit well with me at all.

[doobin]

I’m with @Clutchy  finance over wages every time 

[dan blocker]

Surely you’ll only go bust if your asset’s are less than what you owe and someone wants their money back from either a cash loan(banks) or in terms of kit on finance and you can’t service the re-payments. Smaller operators with little or no kit on finance or loans will just have a shorter week. I’m not trying to make light of it but going bust and having less work are two different things as far as I’m concerned.

[Dan Maynard]

Hmm you can go bust if you run out of cash,  if you have staff on the books and can't pay the wages things will pretty quickly grind to a halt. 

[Mick Dempsey]

6 minutes ago, dan blocker said:

Surely you’ll only go bust if your asset’s are less than what you owe and someone wants their money back from either a cash loan(banks) or in terms of kit on finance and you can’t service the re-payments. Smaller operators with little or no kit on finance or loans will just have a shorter week. I’m not trying to make light of it but going bust and having less work are two different things as far as I’m concerned.

I think in the context of this thread it just means ceasing to trade.

[Retired Climber]

Cashflow (or lack of) kills businesses just as quickly as lack of profit. 

Edited November 5, 2022 by Retired Climber

[Mick Dempsey]

3 minutes ago, Retired Climber said:

Cashflow (or lack of) kills businesses just as quickly as lack of profit. 

It’s rarely an issue in this business (at least compared to construction or similar)

[Retired Climber]

10 minutes ago, Mick Dempsey said:

It’s rarely an issue in this business (at least compared to construction or similar)

Agreed. Still worth keeping an eye on though, imo. 

[Dan Maynard]

I was thinking if you do a lot of commercial work. I don't, but do find parish councils have their own timescale for paying.

[Retired Climber]

20 minutes ago, Dan Maynard said:

I was thinking if you do a lot of commercial work. I don't, but do find parish councils have their own timescale for paying.

It's fairly easy to find yourself technically insolvent. A few big jobs that turn into late payers that happen to coincide with payday for the staff and a good business is suddenly insolvent. 

I had a very similar situation myself. One client did a runner, having conned a lot of people out of a lot of money, one other was slow to pay, a turbo died on one truck at exactly the same time as a fuel pump died on another. At the end of the month, wages needed to be paid, the garage needed paying, and I was very close to not having the money.