Stories

A Business Headache Solved.

P 603i Tom’s Nuts and Bolts

For most businessmen like Tom, their competition is the biggest challenge they will ever face. Today’s marketplace is like dog eat dog, big fish eats little fish, and any little fish will be swimming for its life. It is a real headache.

In days gone by, things were nicer, more peaceful and there was less competition. Profits were higher, too.

Tom has a business making nuts and bolts. Not your ordinary nuts and bolts, specialist things made of high quality steel and aluminium for military equipment manufacturers.

The kind of thing the Europeans once excelled in. Now it has to be wondered how the Germans still manufacture these things, ordinary nuts and bolts made of chrome steel, given the stiff competition in the marketplace. What with China being so cheap, and the difference in quality imperceptible to Tom, he hasn’t a clue how they’ve done it.

Mind you, Tom only makes them, he’s never used a nut or a bolt in his life.

Even so, the Germans have to meet their customers just like he does. For Tom, it’s always an unpleasant experience, because they always want cheaper prices. When everybody’s selling the same thing, competition is going to be tough. It’s why Tom chose to supply the military industries, they want real quality. But they still want a keen price.

What can Tom do? All he can do if he wants to maintain his levels of profits is to demand that they buy more. That way, he makes the same profit he did last year, even if he has to supply twelve pallets where he used to supply ten. But he can ask his transport company to deliver the twelve pallets for the same price as they did ten, so he can at least expect to make the same money. Of course, he will do this in the friendliest of ways, after all, they’ve had a friendly relationship for near on twenty years.

P 603i Eddie Stobart TransportOh. They were bought out last year by Eddie Stobart, which means getting a good price is going to be harder now. Not just a round of golf at Tom’s club and a couple of whiskies at the bar.

It was a response to this news, back in January now, that Tom asked a business advisor to take a look at his firm. They weren’t cheap, but they came with wonderful references from some prestigious national firms like Woolworths, HMV, Motor World and Brentano. Although Tom didn’t know who the latter was, he asked his wife Lizzie who they were, and she said that they’d been a shoe shop on the high street until last year.

To Tom, this sounds good: they’d been in the high street, so the business advisors must be doing a good job. In the fierce world of competition, Tom needs a little help.

In the report they sent him on the 15th of March, he was surprised, no, delighted to read that he was getting things right. They praised his moving his production to Shenzhen in China, his handling of the transport logistics and the manner in which he dealt with sales. The attached invoice was a lot less than they’d estimated, so he marked it for payment so that it would go through his accounting process faster.

In fact, Tom was so pleased that he took the afternoon off and went to play a round of golf with his friend from the transport company, who retired in February.

P 603i Tom's Nuts and Bolts 2What surprised Tom was how friendly Steve was to him. Must be something to do with having sold the business and the lack of stress. Something for Tom to think about, what with the stresses of dealing with his competition. That thought alone meant he missed his stroke, with the ball flying off towards the rough.

As they are searching for the ball, buried in the long grass, Tom really wonders if he should sell up. But then, the report was so filled with praise for his business methods that he finds it impossible to imagine selling his business. The thought of retirement – at the tender age of fifty four? After decades of owning a successful business?

Later, as he sips his whisky in the warmth of the club bar, he remembers with horror, the missive from the Inland Revenue. It was a demand for payment, for his 2013 taxes. It was a lot of money, which Tom simply doesn’t have. His profits are slim enough as it is, without the tax authorities snapping at his heels.

A funny thought springs to his mind. So funny he almost spits out the whisky he’s just sipped. Steve gives him a strange look, but to Tom it really was funny. Tom keeps quiet, but inwardly muses how funny it would be if he could just steal the products to order, rather than having all the fuss of production.

It would be a solution, and one that is far better than retirement. Tom’s mood brightens, what with profit margins what they are, he could improve his profits by around fifty percent if he knocked off the odd container at Felixstowe docks. Who’d know what happened to the container? Was it washed overboard? The insurance would cover the costs, so nobody loses.

What’s more, Steve’s in the know… they could go into business as a partnership, and Tom could keep all the money from the sale to Stainless Consolidated. They’ve been pressuring him for years, now. That’d be a solution to his tax problems, too.

Tom puts down his empty glass of whisky, asks Steve if he wants another. It’s nearly six, after all. Maybe some dinner too?

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