Credit Matters Blog

The Observations of a Credit/Fraud/Risk Manager and Business Owner

Kim Radok 31 July 2011


The world of business is a particularly ruthless place in which to operate. It is a place where the naive, the innocent and the  careless are often swolled up and lost in an instance.

This does not just occur because there are people who are better at doing business and/or who manage to take advantege of the less wary. Often it comes down to simply accepting the truth about the business world and learning to adapt and understand how to operate a business.

The people who survive in business are the hard workers, in the right place at the right time, hang in there when the going get's tough, or learn to adapt as the business world changes around them.

Then of course, there are those that are just plain lucky - however, they are few and far between.

After nearly 40 years of working and being in business, I have learnt you can never take anything for granted, and MUST LEARN from what happens to you.

The observations which follow will be found in the majority of all business organisiations, large and small. Some of you may believe your business operations are built properly and based on sound principles and practices. In my opinion, and from my experiences, you are in the minority.

Not withstanding your beliefs, I urge you to continue to monitor your business and the current environment with on-going vigilance. After all, it is the current environment in which your business operates, where the real business realities are evident.

Today, I am going to focus on seven core business practices observed in the current business environment.

  1. Most business people do not care whether they get paid or not, until there is no money. By then of course, the remedies to get the money are costly and it may be too late.
  2. Very few business people learn from their experiences, or seem unable to transfer what they learnt in one business area/discipline to another; a typical example is what has happened since the GFC.
  3. It is obvious that most business people buy much better than they sell and forget that “ a sale is not a sale until payment is received and cleared by the bank”.
  4. To day, more businesses are selling to third-party customers, who have to pay your customer before your customer pays you.
  5. Fraud has always been part of the business world. Never before has it been so easily identifiable and easly rectified - but measures to reduce it are minimised or ignored.
  6. Many business people are poorly prepared emotionally, and/or structured and/or financed for survival in the long-term. For instance, for many business owners their worst and most dangerous customer is - their friend.
  7. Many business owners do not understand they need to change and re-structure for the future TODAY not TOMORROW if they want to be paid.

Once you understand these observations, you can begin to structure your business for success. I will continue to advocate that you continue to improve the structure of your business and gear it for survival and growth to gain a competitive advantage.

May you be paid today rather than tomorrow.

Kim Radok