In the world of engineering & manufacturing it would appear that China is the root of all price competition.
It hasn't always been thus - a large client of mine set up a heavily subsidised plant in Tunisia some 20 years ago. They moved to China when the subsidy expired and are now busily looking for the next cheap alternative.
Every sector has a 'China', so what is yours and how do you compete?
The deal was introduced by the customer's accountant - a long standing contact of ours.
The customer was an established engineering firm looking to quickly raise cash to buy out a partner. The soured relationship was proving disruptive to the business.
The business itself had had some tough years but was on the road to recovery.
The engineering assets were very old.
Or perhaps that should be 'an awkward deal & an impossible customer'
It could have been our dream deal but for the opening comments of the introducer.- an owner-managed engineering firm is East London, established 15 years, profitable and with a good order book from corporate customers.
The words of the business consultant which nearly killed it were 'The deals has already been a few places & the customer isn't the easiest'.
On the phone the customer was less circumspect 'I'm an awkward old bugger' he informed me.
As a rule we hope to be second in line - immediately behind the bank, or potentially third because not all brokers are great - but once a deal has done the rounds it is difficult to see where we can add value.
Just this once - there were so many sweet spots in the deal I couldn't resist a trip to the East End to see them.
Are they wrong or right?
This article in The Telegraph seems to take the line that the banks are being unreasonable and that the legislation is a good thing.
Personally, I beg to differ - and here are the reasons why..
Perhaps more appropriate title would be 'when loss-leading goes wrong' or 'the true cost of free'.
A little journey through history:
Back in the 20th Century (feeling old now?) there was a major bank called the Midland Bank - so major that it constituted one of the 'Big 4' UK banks.
Ah, nostalgia - it isn't what it used to be!
Perhaps one of our best pieces of business nostalgia is the old-fashioned manager'.
Presumably the mental image of a sort of benign version of Captain Mainwaring visiting or premises or perhaps playing a round of golf with a briefcase full of cash ready to hand over if he likes the cut of your jib.
I wasn't alive during WW2, so can't be sure whether Captain Mainwaring cut a realistic bank manager or not - he looks right though.
Are you in?
On 28th of March the Chancellor announced to the Federation of Small Business
potential plans to force banks to release details of declined proposals to a
platform of alternative lenders featured in this article.
