papervalue
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What is starting to become very clear to me is that the Celtic Tiger disguised poor cash management practices because there was a steady stream of income from increasing sales. As this is no longer the case it is hitting some small businesses very hard (especially retailers who didn't manage their stock levels and cash outflows). This is compounded by the fact that banks (despite all their PR) are not releasing adequate credit.
To say that the Celtic Tiger disguised poor cash management is too wide a statement
Rent is a fixed overhead. During the boom even if businesses were managing their cash flow and current sales income covered this cost, now many businesses sales are substantially lower but their rent hasn't been reduced or not reduced enough so as not to erode profits and cash. Path, on price per sq ft are you paying more than the other tennant and if so have you tried renegotiating your rent?Tennant next door paying 20k less than me so I am now bleeding cash. Turnover seems to be down 25% - 30% on non Food Retailing.
Problem is that during the boom times, business cash flows appeared healthy. When the reality for many businesses was, that costs (especially indirect costs such as wages and rent) were spiralling out of control and were actually being financed out of future sales rather than current sales.
Rent is a fixed overhead. During the boom even if businesses were managing their cash flow and current sales income covered this cost, now many businesses sales are substantially lower but their rent hasn't been reduced or not reduced enough so as not to erode profits and cash. Path, on price per sq ft are you paying more than the other tennant and if so have you tried renegotiating your rent?
My boyfriend works in recruitment.
His company are now starting to see more work come in (although obviously much reduced+++ than previously)
Nicola
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