Credit Matters Newsletters

This month we continue to complete a number of small tasks which may not be readily visible. Nevertheless, they are important for the efficient operations of Credit Matters.

Advertising via Credit Matters

If you are interested in reaching a wider group of business prospects, contact Kim to see what we can do for you. There are many different opportunities to advertise your business. The benefit of advertising with Credit Matters is we offer one of the few opportunities to reach a broad marketplace of customers with financial risk management issues.

This month you can review two new courses advertised by Investigator Upgrade and by our new advertiser FIFO Capital presenting new ideas on alternative forms of finance.

There often seems to be an unwritten business policy in some organisations where the costs of mistakes will be tolerated. It appears as though management in these organisations has decided they can hide the costs of mistakes by not identifying them. After all if you don't measure your costs they do not become visible.

Management also often articulates that their "limited resources" can be spent better on other more "proactive" business priorities. As a result, there is little action taken to stop the mistakes occurring and re-occurring.

As a consequence, unnecessary costs are incurred, and these costs continued to be incurred time and time again. Worse still, the business gains no benefit from processing these mistakes.

In these situations, management is prepared to throw money away allowing costs to be incurred for no good reason. The question is then; "Why doesn't management spend money to save on costs and increase efficiencies?" After all, money spent on stopping mistakes will save money on an ongoing basis and in to the future.

Your conundrum therefore is; why spend money for no benefit, when you could spend money which will benefit the business?

Where is the law that says your business must act detrimentally against another business to make money?

I do not believe there is one. Therefore I agree with Jeff Kennett, "Even competition can be conducted with dignity, rather than abuse."

The question is: "Why do so many business people try to exploit other business people and not work with them to achieve positive benefits for all?" After all, there are many business examples of collaboration between competitors which leads to profitable outcomes for both organisations.

Ultimately, the costs of exploitation are usually less than the expected benefits if the exploitation is exposed. Unfortunately for exploiters, in today's modern world, exposure is only the click away of a disgruntled employee or business acquaintance. As always, the final price paid when exploitation is identified, includes lost reputations, the cost to fix the problem, loss of sales, and possibly the loss of credit facilities.

In the last few months alone, those organisations exposed of exploiting others in their communities, is alarming. This situation is especially disappointing when you consider the organisations named were often thought to be so reputable in the past.

One way to test the cost of exploitation verses the benefits of working would be to review the conduct of your suppliers and customers. In every relationship, there are costs and benefits. I respectively suggest if you analyse each trading relationship properly you can identify those suppliers and customers which are exploiting your business for the one-sided benefit of their own business. In addition, if the analysis is completed properly, you will also identify the ROI for each relationship.

It is a sobering thought, most businesses that discover they have been exploited, find it is usually happens due to the actions or inactions of their own management team. In these same organisations, you will also generally find other problems impacting on the issues of probity and profit performance.

I see no problem in your suppliers and customers wanting to be profitable. That is why business organisations exist; to make a profit. Where I see the real problem is when one party seeks to take advantage of the other through abuse of power or by false declarations and omissions of fact. These actions are not signs of reputable business behaviour.

In conclusion, co-operation between suppliers and customers always leads to greater profits for both organisations. For any business to survive in the long-term, it needs to have reliable suppliers and customers. If you must deal with the rest, you better be able to prove there is a profitable reason for a continuing relationship.