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Credit Matters
What's New At Credit Matters?

What's New At Credit Matters?

Due to a number of other events and seminars, this newsletter only contains our normal content. We have however added a link in our special topics section to an article with additional information about the issues of fragmentation to supplement this month's blog; FRAGMENTATION, THE DESTRUCTION OF VALUE IN YOUR BUSINESS?

It has also been decided not to include any brochures with this edition.

As always, if you wish to promote your business services at an affordable rate, contact Kim at You will be surprised at the value we have to offer.

Quote Of The Month

Quote Of The Month

“The only thing more dangerous than ignorance is arrogance.”

Albert Einstein

Monthly Business Observation

Monthly Business Observation

Nothing breads arrogance like success.

The opposite is also true. It is the occasional negative reaction to decisions that is often the great reminder that all businesspeople need in order to remind them that you cannot afford to be arrogant or lazy in business. The reality is not to make too many mistakes that cost all the business’s capital and reputation. Do that, and you soon don’t have a business.

Here are a few examples which we have seen already in the last year or so when businesses do not adapt to changing conditions or new competitors.

Businesspeople who are successful in one industry, think they can simply replicate the same business model in another industry. Too often they come unstuck because they did not properly understand the other industry or marketplace.

Growing your business by taking over a competitor can be one strategy to grow your business. Unfortunately, despite the competitor being in the same industry, the operations and culture between the two businesses are often vastly different. Too late the business buying the opposition finds out they bought something entirely different to what they thought they were buying.

Debt can be useful, however if you borrow unwisely you soon get into trouble, even when interest rates are low. A perfect example was the number of debt laden businesses which could not survive the first three months of the COVID induced recession in 2020.

Cashflow, as we are constantly reminded, is the lifeblood of the business. Again, look at the businesses which did not survive the first months of 2020, or had to take on debt for the first time to survive, because they ran out of cash.

Any salesperson can sell a dollar for $.50 cents is an old criticism of some salespeople. It is not always their fault however. It is often due to the work regimes they operate under. Such sales strategies can soon see a business in financial trouble.

Employing the wrong purchasing and salespeople, combined with poor employment and reimbursement practices, encourages sales and purchase fraud. When losses are incurred, usually it is the salesperson or purchase personnel who are blamed. In reality, it was the management strategies which allowed the frauds to happen.

Many businesspeople believe their accounts payable and receivable people are just costs to the business and do not add any value to the business. Therefore, management often fails, or disregards, the value and insights about what is happening within their own business offered by these employees. In addition, these same employees are also in an excellent position to report on insights of their suppliers and customers.

In these situations, when customers don’t pay and suppliers are paid incorrectly, those in accounts are often held to blame. Alternatively, sales, purchase and financial fraud can be an unrecognised problem until it is discovered and many dollars lost.

The list goes on and on about how arrogant and lazy businesspeople cause so much damage because they think they know all there is to know about business. On the other hand, it is usually the businesspeople who are aware of the possibility of risk and uses mistakes to make themselves better operators, which survive in the long run.

Monthly Business Conundrum

There are some customers which operate in a manner, where you, the supplier, will never make a profit. This usually stems from the following reasons, or a combination of them.

1          The supplier has failed to understand that if you sell at a loss often enough, you soon will not have a business.

2          The supplier is afraid that they will lose another customer which they can sell to, even if it is a loss. Perhaps they should refer to point one.

3          The supplier does not know how to sell, or have salespeople that cannot sell, yet are great order takers.

4          The supplier forgets, if they cannot make a loss-leading customer profitable, it is unlikely their competitors will either.

In a time of a recession, you can go broke quickly by having no sales. This may however, allow you to see the truth of your current business model and so you can do something positive about it.

Alternatively, you can go broke slowly and painfully and end up with an insolvent business with all those negative consequences.

Perhaps it is always best to then send your unprofitable customers to your competitor as soon as possible and give your business an option of survival in the long term.

Monthly Business Conundrum
This Month's Business Inconvenient Truth

This Month's Business Inconvenient Truth

Today, it appears the philosophy in the art of business is no longer respected or deemed of value in many business models. Inevitably you find the strategies of these businesses is based on three strategies of (i) the use of technology tools which dictate how people operate, (ii) cheap costing employees and (iii) cheap debt.

In these business models; minimalistic strategies are often found to end up costing more money than they are worth. The usual results of these minimalistic strategies include increased downstream process cost overruns, unexpected loss of sales and an increase in costs due to cybercrime and frauds.

The art of business is always about employing the right technology, people and operating processes which increase sales and offer a properly calculated return of investment. Operating a business in today’s business environment where change is ever present, means you need a business model or format, which is adaptable to changing circumstances.

Several interesting features of recent times has been demonstrated clearly by the business stories over the past 12 to 15 months. There stories demonstrate why some businesses have not survived. Meanwhile, others which have survived and/or have gone on to reap the rewards of being able to adapt to different circumstances. In fact, we are going to see further examples of these stories over the next 6 to 12 months when government support ceases plus the tax authorities, landlords and creditors start demanding payments again.

It will be these stories which demonstrate how important it is to understand the art of business. I will be looking forward to seeing these stories. Other businesspeople of course, will only be looking forward with sadness and dread in their heart as they realise their simplistic business models were unsustainable.

At the end of the day, knowing the art of business will be one of the factors which had led to the success of the business survivors.


Credit Matters is a financial risk management resource centre for the Australian business community. If you are in business, Credit Matters is your ideal source of financial risk management solutions.

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Future Opportunities & Possibilities

Credit Matters is continuing to grow and provide marketing and knowledge about financial risks to the Australia business community.

Futhermore, we invite marketing and knowledge ideas from our readers and contributors on how we can assist our respective firms grow. If you have any ideas, please contact me at

If you are interested in finding new ways to reach your marketplace, why not try Credit Matters. Our prices for advertising are very reasonable and advertising packages are on offer to make any cost, even more affordable. So if you are interested in reaching your customers at the right price, please contact Kim at for options.