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flushgordon1
01 Jun 12 11:08
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Date Joined: 25 Jun 11
| Topic/replies: 17,872 | Blogger: flushgordon1's blog
well there ye go.
Pause Switch to Standard View martin lewis sells money saving...
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Report flushgordon1 June 4, 2012 11:05 AM BST
sugarLaughLaugh
Report tonkability June 4, 2012 11:31 PM BST
He is the darling of the greedy and the needy people who won't spend Xmas,personally can't stand the little sister.
Report tonkability June 4, 2012 11:32 PM BST
Shiyster
Report cheese June 4, 2012 11:49 PM BST
Sugar's pretty representative of most self-made businessman. Maybe 10% of his
ideas made money. Most lose money. Branson's hit rate is similar (Virgin coke
any one?).

If you or I started a business we might expect to have that same 10% chance
of real success. It might be 15% if we work really hard at it and have a fantastic
idea but it is always a punt. There are so many random variables that can
screw things up.

The difference between Sugar, Branson and the rest is that they get lucky early
on and then have the cash to bankroll further businesses till they get another
success.

If you can show me someone who has a disproportionate success to failure ratio
as a businessman I'll hold up my hand and acknowledge their genius. But those
people are pretty rare. I can only think of one offhand (Warren Buffet).
Report sibaroni June 5, 2012 12:10 AM BST
I think that is unlikley to be true.  I don't have a personal drum to beat - I haven't got a string of successful businesses behind me.

But their is an inate commercial ability that some have in spades.  There is hard work; and I mean really hard work.  I do not include myself in either category.

They are, from what I can observe, entirely different skills from plain academic intelligence.

You might make a case cheese for saying that being born with those skills shouldn't be rewarded by many millions, of course.

But on either of our analysis'; Martin Lewis has done very little harm and a great deal of good.  He finds himself now to be very rich.  Some on here are plainly envious - which I find to be a hallmark of socialism.

I am delighted for the guy, he seems nice and has done more good than harm.  If I am right in my reading of that, only socialism could find fault; only envy.
Report cheese June 5, 2012 1:10 AM BST
But their is an inate commercial ability that some have in spades.  There is hard work; and I mean really hard work.

This is the standard Tory line (why does this not surprise me coming from a LD?).

If you "work hard" at a business you might, if you are really industrious, save yourself the salary of half a good employee.
That's not going to make the difference between success and failure. "Hard work" is very easy to quantify mathematically
as a business asset, and very easy to dismiss as a negligible factor.

What will actually make or break your business:

If you run a haulage firm a spike or drop in the price of oil.

If you run a consumer-orientated business a small change in the broader economy.

If you run a business based on intellectual propery, random and arbitary decisions on patent law.

If you run a tech firm, whether a big player decides to buy you up or squash you.


None of these things are remotely predictable with any significant degree of accuracy. And there
are a billion other variables like these.

The businessmen with the highest success to failure ratios are invariably those who practice
effective risk management. The high-profile success stories you hear about are usually clueless
gamblers who got lucky.

Lewis isn't really either. He is a very good journalist who deserves a big salary for his excellent
consumer advice.

Whether his business success is down to his great judgement I tend to doubt however. MSE is
actually a very poorly designed website with an incomprehensible affiliate model. The web is
littered with the corpses of such ventures, many (like MSE) with great content. I tend to
think it became successful because it was in the right place at the right time.
Report flatliner June 5, 2012 3:56 AM BST
Does the BBC get a cut?
Report MRGRUMPY1 June 5, 2012 7:58 AM BST
cheese     04 Jun 12 23:49 

The difference between Sugar, Branson and the rest is that they get lucky early
on and then have the cash to bankroll further businesses till they get another
success.



......Or as actually happens, it becomes much easier to find some other mug to bankroll future ventures.
Report flushgordon1 June 5, 2012 10:08 AM BST
had sugar not got the contract for building sky boxes when he did he was not going anywhere fast,
there is a lot of luck,being in the right place at the right time,nepotism and as they say 99% perspiration 1% inspiration.
Report cheese June 5, 2012 10:28 AM BST
Or as actually happens, it becomes much easier to find some other mug to bankroll future ventures.

That's very true also. Notice the runner-up in this years apprentice seemed very confident of being able
to raise $25 million solely on the basis of Sugar's name.

To his credit, Sugar didn't want to use other people's money. Most businessmen are less scrupulous.
Report Dr Crippen June 5, 2012 10:30 AM BST
Cheese's last paragraph, is very telling. There he goes on about Lewis's sh!te website. It is poor but it's good enough.
If success in business was down to website design we'd all be millionaires.

Instead of peeing about with his website all day which is the easy bit, Lewis was getting himself on the radio and television telling the world about it, which is the hard bit.
There's a lesson there.
Report Nocash June 5, 2012 10:37 AM BST
Dr Crippen     05 Jun 12 10:30 
Lewis was getting himself on the radio and television telling the world about it, which is the hard bit.
There's a lesson there.


Too true.....Get yourself a good agent.
Report cheese June 5, 2012 10:46 AM BST
Instead of peeing about with his website all day which is the easy bit, Lewis was getting himself on the radio and television telling the world about it, which is the hard bit.

No, celebrity by itself did not make that site popular. There are hundreds of celebrities more famous than Lewis, who was pretty much C-list at best when he set up the site. If they could all make 87 million, which is a lot of money even for a celebrity, they would all be doing it, in the same way that any successful pop star nowadays sells a perfume.

It was Lewis's website which actually made money at the end of day. I suspect most people using that site, like me, focus on their area of interest in specific forums, and pay comparatively little attention to anything Lewis writes.
Report Bentley Boy June 5, 2012 10:48 AM BST
Achieving some kind of Celebrity status, via any means whatsoever now seems the way to earn lot's of money quickly, with talent and hard work of little account in the celeb driven media. Sleep with a soap star, premiership footballer or appear on a reality TV show and there seems to be a short lived (or long term in a few cases)lucrative career available.

Good luck to Lewis who seems a decent bloke.
Report flushgordon1 June 5, 2012 10:51 AM BST
he never made me a million but his commonsense advice certainly saved me a few quid.
in his wildest dreams i dont think he imagined his site would ever have paid off the way it has,and thay have probably paid way over the odds for his internat venture(as are most of these types of things)
so he has won a watch.
Report Dr Crippen June 5, 2012 11:11 AM BST
Sugar’s programme ‘The Apprentice’ looks for what Sibaroni described in his last post as ‘’But their is an inate commercial ability that some have in spades.
, entirely different skills from plain academic intelligence’’

On Sugar’s show they go to him with immaculate academic qualifications, and he turns around and says to them‘’ you can wipe your arse with those, I want to see what you can do’’

Boy do they get thrown in at the deep end.
Report Nocash June 5, 2012 11:16 AM BST
Dr Crippen     05 Jun 12 11:11 
Boy do they get thrown in at the deep end.

How so? In my opinion everything is handed to them on a plate.
Report Java June 5, 2012 11:17 AM BST
Cheese is SEETHING that somebody had success.  Laugh
Report flushgordon1 June 5, 2012 11:18 AM BST
the apprentice is a load of staged bollux.
they pick the most obnoxious bunch of people to artificially create friction and grief.
if you had a normal business with the assembelled talent on the apprentice it would last about a fortnight.
most of them end up doin pr and other consultant pish which allows them to use their ten minutes of fame on some easily impressed dafties  to remove sums of money for a period of time until they fade back into obscurity,
the apprentice ffs
Report Dr Crippen June 5, 2012 11:27 AM BST
Whether the Apprentice is staged managed or not, what they are looking for is the closest I can give to an illustration of what Sibaroni was talking about at its basic level.
Report Dr Crippen June 5, 2012 11:30 AM BST
You see this ability in the self employed uneducated plumber who has just charged his educated customer £300 for changing a washer on his tap.
He doesn't know whether he's ripped him 'off' or ripped him 'of' but he knows who’s got the £300 now
Report Nocash June 5, 2012 11:35 AM BST
Dr Crippen     05 Jun 12 11:30 
You see this ability in the self employed uneducated plumber who has just charged his educated customer £300 for changing a washer on his tap.


Nothing to do with the ability of the plumber, all to do with the stupidity of the customer.
Report sibaroni June 5, 2012 11:46 AM BST
I have a friend.  He left school and became a carpenter.  He was in bottom sets at school and sh*te at sport.

He used to put 33% of the money he earned aside, because his accountant told him to make provision for tax.  Other than a mortgage, he never took debt.

He is worth many millions today, and a completely down to earth bloke as well; you wouldn't pick him in a crowd.

I guess Cheese regards him as lucky.
Report Nocash June 5, 2012 11:53 AM BST
sibaroni     05 Jun 12 11:46 
He is worth many millions today, and a completely down to earth bloke as well; you wouldn't pick him in a crowd.


Guess he just made provision for tax instead of actually paying it.
Report Java June 5, 2012 12:00 PM BST
"I guess Cheese regards him as lucky."

I would guess he makes Cheese's face contort in jealous rage.
Report sibaroni June 5, 2012 4:56 PM BST
No, he paid his tax all right.  I included it to give a sense of the guy - he was prudent and used common sense.  He didn't try flighty financial tricks.

He took on a couple of lads and trained them.  They were charged out to to his customers and paid a wage.  The lads were very loyal to Phil, wouldn't hear a word against him.

Sometimes when Phil had cash, he bought a house did it up and kept it with a tenant.  He always vastly improved his own house.

A couple of friends wnated to open a bar restaruant.  They went into a three way partnership, with Phil extending the properties they bought and kitting it out for a third share.  They have a number now.

And on it went.  Common sense, hard work.

I know it is in a totally different area, but Martin Lewis seems similar.  He set up a web site in his bedroom and was dedicated to it.

I can't think of a better story frankly - but it does expose socialism and socialists in the worst possibe light when they are unable to applaud the success.
Report flushgordon1 June 5, 2012 5:10 PM BST
dont let him start up a psuedo intellectual cult on the belief of a greater being  or it will all go t!ts up.
Report flushgordon1 June 5, 2012 5:12 PM BST
or turning 3 bags of kindling into 6 queen anne chairs.
Report 1st time poster June 5, 2012 6:52 PM BST
obviously pure luck as one of his biggest recomenditions was for people to invest in the icelandic banks,probably the worst bit of fianancial advice ever given,swiftly followed by telling people to tie themselves into long contacts with service providers months before utility price wars broke out, might well get a knighthood in iceland
Report Dr Crippen June 5, 2012 8:05 PM BST
That's not true about the Icelandic bank.

I read Lewis's page about the Icelandic bank and didn't invest in it because of his warnings.

Private accounts were covered by the government's guarantee anyway.
Report cheese June 5, 2012 11:06 PM BST
He used to put 33% of the money he earned aside, because his accountant told him to make provision for tax.  Other than a mortgage, he never took debt.

He is worth many millions today, and a completely down to earth bloke as well; you wouldn't pick him in a crowd.


I'm not even sure how I'm supposed to respond to this. You know someone who got rich, splendid.

Inferring a broader truth about the nature of capitalism from a sample size of one, with little actual detail, however,
would be impossible. You might explain, for example, what he actually does...
Report cheese June 5, 2012 11:12 PM BST
Sometimes when Phil had cash, he bought a house did it up and kept it with a tenant.  He always vastly improved his own house.

Oh I see, a property speculator. Obviously there's no luck at all in benefitting from a highly volatile property market.

Those people who bought just before the market went tits up, they were different...(for some reason).
Report sibaroni June 6, 2012 12:37 AM BST
You can't do it can you.  You can't say well done to Lewis, on a sample size of one.  But I can't give you an obvious example of a decent bloke who made money out of his own graft, because he is a sample size of one.

He has been through two property crashes.  Neither affected him because he buys the house, puts in a tenant, and carries on.  Because he doesn't borrow or live beyond his means, because he hasn't changed much.

And you seethe.  The socialist in you hates him.  Here is the news.  He has paid more tax than you and provided more employment than you.  Or most of us on here.

those of us who do not concern ourselves with what other people may have applaud this guy - we recognise he is the sort of man who keeps the economy going.

You?  You're just envious.  That is socialism.  It is a very miserable way of being.
Report cheese June 6, 2012 2:12 AM BST
You can't say well done to Lewis, on a sample size of one.

I already did say he deserved his money. If it makes you feel any
better "well done Martin". 

He has been through two property crashes.  Neither affected him because he buys the house, puts in a tenant, and carries on.  Because he doesn't borrow or live beyond his means, because he hasn't changed much And you seethe.  The socialist in you hates him.  Here is the news.  He has paid more tax than you and provided more employment than you.  Or most of us on here..

You misunderstand me. The investor in me hates property speculators. They are idiots with a child's faith in ever-rising, unsustainable property values. The enviromentalist in me hates their useless over-supply poisoning the landscape with bricks and mortar. The patriot in me despairs at this never-ending useless non-productive economic focus on a single, culturally valueless sector that is destroying British society...and so on.  The socialist in me barely registers at this stuff. I doubt Warren Buffet thinks any different.

And, vulgar as it is to talk about money but you haven't exactly left me much option, I very much doubt this guy has paid more tax than me, and certainly has not employed as many people.

I don't even know why you are sounding off about this stuff since you admitted yourself you know nothing about business. The point of capitalism is capital, the winners being those who risk it, something neither right nor left have ever argued. You want to see someone work hard go find a nurse. Capitalism is not and has not ever been about rewarding hard work.
Report sibaroni June 6, 2012 2:32 AM BST
Alright.  I most certainly have not said I know nothing about business and I happen to run a million pound turnover business.  Self deprecation from both sides.

But irrespective of what you have done, and my very genuine mate Phil has done, or Martin Lewis has done - you were on here earlier (I cannot be bothered trawling through the posts) telling us that all if not most capitalist success was down to luck.

I am very lucky in what I do; I get to witness other people's businesses every day.  I meet people who make fortunes and people who lose them.  There is luck of course.  But mostly luck has little to do with it.  Some people like to be employed.  Some start businesses.  Some want businesses that suit their lifestyle.  Some are more ambitious than that.  And of the last group, some win ; some lose.

So then rich employer tax paying man; have you got lucky?  Have all the businessmen you deal with got lucky?  Or are able people building businesses?
Report treetop June 6, 2012 12:38 PM BST
Reading about Martyn Lewis's good luck I wonder if the BBC,or any of its producers, are due any money out of this deal as he seems to have been promoted endlessly on the Jeremy Vine show, Radio4 and other programmes to help build up his profile and the value of his business.
Report Dr Crippen June 6, 2012 12:52 PM BST
Treetop,

They probably settled up ages ago through backhanders.
Report cheese June 6, 2012 8:30 PM BST
I most certainly have not said I know nothing about business and I happen to run a million pound turnover business.

I'm assuming it is actually profitable? Turnover really means nothing.
It is way more impressive to say "I have a business with £10,000 profit pa"
than it is to talk about any kind of turnover figure.

But irrespective of what you have done, and my very genuine mate Phil has done, or Martin Lewis has done - you were on here earlier (I cannot be bothered trawling through the posts) telling us that all if not most capitalist success was down to luck.

What I actually said was that the capitalist is renumerated over and
above the value of his labour because he is risking his capital. This
is not something cheese thinks. This is something accepted by every
economist of the left or right anywhere, indeed it comes from the
conservative bible, Smith's Wealth Of Nations. It was
subsequently used by Marx as the basis of much of his research.

In short, I am stating a fact, not an opinion.


I am very lucky in what I do; I get to witness other people's businesses every day.  I meet people who make fortunes and people who lose them.  There is luck of course.  But mostly luck has little to do with it.  Some people like to be employed.  Some start businesses.  Some want businesses that suit their lifestyle.  Some are more ambitious than that.  And of the last group, some win ; some lose.


You are perpetuating a fallacy. Most people can't even afford
to set up a business because the capital entry requirements
are way too high. Of those that can very few outperform the average
over time.

So then rich employer tax paying man; have you got lucky?  Have all
the businessmen you deal with got lucky?  Or are able people building
businesses?


Yes, there is a strong element of luck, as should be perfectly obvious.

I explained to you above why: there are so many unpredictable variables
that no amount of hard work will compensate for should they align against
you. You persist with this weird puritan notion in spite of the obvious
evidence to the contrary.
Report sibaroni June 6, 2012 10:49 PM BST
I'm assuming it is actually profitable? Turnover really means nothing.
It is way more impressive to say "I have a business with £10,000 profit pa"
than it is to talk about any kind of turnover figure.


That pretty much confirms to me you have never run a business despite what you say.  Not that I am suggesting profit is not a good thing, or indeed running at a loss is not a bad thing.  But every business has its own needs - BUPA is not for profit, but it employs some very rich people.

I think you are a fantasist and I think this thread has rather painted you into a corner.  I look forward to your next obtuse rant, but I'd really leave it if I were you.
Report treetop June 6, 2012 11:20 PM BST
Cheese has a valid point sib, quite a few small and medium businesses have had a turnover that has yielded no profits or even a loss over the last few years. Some have struggled to stay in business to maintain qualified staff hoping for an upturn or just to regain an upward trend to enhance a possible sale. It is profit that counts ,not turnover.
Report blackburn1 June 7, 2012 9:10 AM BST
I'm assuming it is actually profitable? Turnover really means nothing.
It is way more impressive to say "I have a business with £10,000 profit pa"
than it is to talk about any kind of turnover figure.


cheese talks 99% bollox but this is spot on. Running a law firm is not a real business, theres no plant or product, you just need a secretary, a desk, a pencil and a shelf full of law books. sib fits my experience of lawyers, they are condescending, unworldly and naive. Most worryingly, most have few principles
Report Java June 7, 2012 9:31 AM BST
"I'm assuming it is actually profitable? Turnover really means nothing.
It is way more impressive to say "I have a business with £10,000 profit pa"
than it is to talk about any kind of turnover figure."

Utter horsesh*t.  If a business makes millions for 5 years in succession, and then loses 10k the following year due to an extraordinary P&L item, then do you think you'd be more interested in the fact that it lost 10k or the fact that it has a 100 million pound turnover?
Report blackburn1 June 7, 2012 9:37 AM BST
java, sorry but you're wrong here. It is impossible to lose money as a solicitor, no stock, no plant, no real investment, a massive % of your income is legal aid so you wont get knocked. Most firms go skint because they cant sell the stuff they've bought or made

sib couldn't run a business anymore than the dorks like horse and clay.
Report Java June 7, 2012 9:40 AM BST
"Cheese has a valid point sib, quite a few small and medium businesses have had a turnover that has yielded no profits or even a loss over the last few years. Some have struggled to stay in business to maintain qualified staff hoping for an upturn or just to regain an upward trend to enhance a possible sale. It is profit that counts ,not turnover."

Disagree.  Turnover illustrates a business's potential.  Profit is simply a yearly snapshot of realisation of that potential. 

If someone told me they owned a business with a £5 million turnover, that tells me far more than if they said they had a business that made £100k last year.
Report Java June 7, 2012 9:40 AM BST
"That pretty much confirms to me you have never run a business despite what you say"

Agreed.
Report Java June 7, 2012 9:43 AM BST
"Running a law firm is not a real business, theres no plant or product, you just need a secretary, a desk, a pencil and a shelf full of law books."

This is a bit harsh.  Turnover is their fees, but their costs are significant.  Salaries, premises, promotion, indemnity (this will be a big one I'd imagine) and professional fees just off the top of my head?
Report blackburn1 June 7, 2012 9:45 AM BST
If someone told me they owned a business with a £5 million turnover, that tells me far more than if they said they had a business that made £100k last year.

Have you taken leave of your senses man?

This £5m turnover may be because they have £10m of stock in a warehouse that they're selling at below cost. Go to the bank to borrow some money, tell them sales are great but you're losing a packet.

Phuck me java you've turned into clay

Sad
Report Java June 7, 2012 9:45 AM BST
"java, sorry but you're wrong here. It is impossible to lose money as a solicitor, no stock, no plant, no real investment, a massive % of your income is legal aid so you wont get knocked. Most firms go skint because they cant sell the stuff they've bought or made"

Well I'd agree solicitors are far less likely to go bust than a firm that has significant fixed costs, but I still think turnover is a more useful number than profit for all businesses.

The fact that solicitors are less likely to suffer from cashflow pressure shouldn't change that fact?
Report Java June 7, 2012 9:49 AM BST
"This £5m turnover may be because they have £10m of stock in a warehouse that they're selling at below cost. Go to the bank to borrow some money, tell them sales are great but you're losing a packet."

Well yes.  But obviously I am operating on the assumption that the business is running in a rational and logical fashion.  Clearly if a business loses money 5 years in succession then there is a problem with the business model.

I could just as well say, well the profit could be because you have kidknapped your main customer's family and forced them to pay 1000% above market?
Report Java June 7, 2012 9:50 AM BST
I'll go back to what I said earlier and I stick by it:

"If someone told me they owned a business with a £5 million turnover, that tells me far more than if they said they had a business that made £100k last year. "
Report blackburn1 June 7, 2012 9:50 AM BST
but I still think turnover is a more useful number than profit for all businesses.

java that is insanity.

Imagine I have a business, turnover £3m, no debt, £100k profit, I want to sell as I'm 65.

You have a business turning over £5m, £2m debt, £100k loss, you want to sell to bail out.

Which one of us finds a buyer?

I cant believe we're having this conversation java, check Woolworths turnover then tell me why they didnt find a buyer.
Report flushgordon1 June 7, 2012 9:54 AM BST
how is turnover an indicator of business potential?
if you are selling high value product items of say 30k an item (cars,boats) you dont need to sell many to turnover a million,
if you are selling electronic components at 3 to 5 p an item you have to sell a lot more to reach your million turnover ,
the bottom line is if you are making 2p on you 5p switch/diode you have made £200k on your million sales.
if you have only made 5k profit a car on your 1 mill turnover your man with the switches  is considerably more wealthy than yow..
Report flushgordon1 June 7, 2012 9:56 AM BST
or even in blackies case where you are selling burgers with a 100 to 150% margin you dont need to sell a million to have a good return .
Report Java June 7, 2012 10:13 AM BST
"Imagine I have a business, turnover £3m, no debt, £100k profit, I want to sell as I'm 65.

You have a business turning over £5m, £2m debt, £100k loss, you want to sell to bail out."

It is obvious the lower turnover business finds a buyer.  But we can all come up with extreme examples, I've shown this already.

Business 1:  10k turnover, £200 profit for year
Business 2:  £5 billion turnover, 100k loss for year

Which one do you want for free?  Which one do you reckon has the potential to make you rich with a bit of tweaking?
Report flushgordon1 June 7, 2012 10:16 AM BST
ffs java even some monkey in finance land can work that one out without using his computer programme to tell him.
Report blackburn1 June 7, 2012 10:17 AM BST
java, I'm not sure whats going on here tbh.

I'm soory to say this but it seems you've never bought or started a business.
Report Java June 7, 2012 10:21 AM BST
Blackie.  I haven't run a small business, but I have several associates who do and they always discuss what is happening to their turnover, for precisely the reasons given above.  It is a better indicator of how their business is doing in the longer term.  It shows market presence, volume of customers and effectiveness of marketing.

When your turnover is established if is likely that tweaks can be made to improve profitability assuming it is a viable business, or indeed turn any loss into a profit.
Report flushgordon1 June 7, 2012 10:23 AM BST
Blackie.  I haven't run a small business,
would never have guessed javaLaughLaughLaugh
Report Java June 7, 2012 10:24 AM BST
"the bottom line is if you are making 2p on you 5p switch/diode you have made £200k on your million sales."

£1 million turnover = 20 million sales at 5p.

2p profit on each one = £400k profit?
Report Java June 7, 2012 10:26 AM BST
"you are selling high value product items of say 30k an item (cars,boats) you dont need to sell many to turnover a million"

This example is silly.  The car man only has to make 33 sales to get to his million.  The diode man has to make 20 million sales.
Report blackburn1 June 7, 2012 10:29 AM BST
but I have several associates who do and they always discuss what is happening to their turnover

Yep, its a vanity thing, they wont discuss profit until the bank pulls the rug.
Report Java June 7, 2012 10:41 AM BST
Perhaps.  But a single year of profit is less informative than turnover for the same period.
Report cheese June 7, 2012 11:23 AM BST
I am just amazed at what people will argue about on this board.

Turnover means the amount of money a company brings in.

Net Profit means the amount of money a company brings in minus
expenses.


Now, which do you think is the more accurate measure of the
value of a company? How on earth could less information
about a company tell you more about it?
Report Java June 7, 2012 11:27 AM BST
"Now, which do you think is the more accurate measure of the
value of a company?  How on earth could less information about a company tell you more about it?"

Before I answer this with an example do you really want to stand by this?
Report cheese June 7, 2012 11:32 AM BST
I haven't run a small business,

You went up in my estimation here by admitting this.

By contrast Sibaroni ran away from the argument after pretending
he was some kind of authority figure, tried to dupe everyone with
a turnover figure as if we wouldn't know what it meant, and
subsequently tried a feeble piece of magicians misdirection by
waffling on about not-for-profit organizations.
He then left Java to explain the enormous turd he had left behind.
Report Java June 7, 2012 11:35 AM BST
Can't be bothered to wait.

Company 1:
Sells 10,000 units a year at £100.
Cost per unit is £99, chiefly because they pay their staff extremely generous wages.
Turnover = £1 million
Profit - £10,000

Company 2:
Sells 100 units a year at £500
Cost per unit is £400.  They pay their staff very low wages.
Turnover = £50,000
Profit = £10,000

Profits are the same.  In your world these companies are presumably identical.  I assume you would pay the same for either company.

Question:  Which company do you think has FAR better long term prospects?

I can come up with numerous examples which make your statement on profit frankly niave.  R&D?  Bonuses?  Capital investment?  Sunk costs?
Report Java June 7, 2012 11:38 AM BST
"He then left Java to explain the enormous turd he had left behind."   Grin
Report blackburn1 June 7, 2012 12:31 PM BST
Laugh

java, in all seriousness I think you're confusing PLCs with SMEs, the latter just dont survive using your barometers.
Report Nocash June 7, 2012 12:34 PM BST
Turnover is vanity but profit is sanity.
Report Java June 7, 2012 12:43 PM BST
"java, in all seriousness I think you're confusing PLCs with SMEs, the latter just dont survive using your barometers."

Nor do they survive on your barometer of profit as I'm sure you know being a businessman yourself?  We'll take 60 days to pay.  Now we'll take 90 days to pay.  Cheque is in the post.  Oops someone has gone bust etc etc etc.

If you have a higher turnover, you are more insulated from cashflow issues imo.
Report Java June 7, 2012 12:44 PM BST
"Turnover is vanity but profit is sanity"

You might be right that turnover carries an element of vanity, but plenty of profitable companies have gone bust.
Report Nocash June 7, 2012 12:47 PM BST
Java     07 Jun 12 12:44 

...........but plenty of profitable companies have gone bust.



..............are you on drugs
Report blackburn1 June 7, 2012 12:48 PM BST
If you have a higher turnover, you are more insulated from cashflow issues imo.

java whats up with you today? If you have a high turnover but you are losing money it means your outgoings are higher, payment terms are irrelevant
Report Nocash June 7, 2012 12:56 PM BST
I go a bank and borrow £ million. With the £ million I purchase 10 cars at £100,000 each.
I then sell these cars for £50,000 each.

When I return to the bank for another loan and explain how I have built up a £500,000 turnover company in the space of one hour.

Will they look at me favourably or not?
Report Java June 7, 2012 12:58 PM BST
"........but plenty of profitable companies have gone bust.
..............are you on drugs"

I take it you have no concept of the struggles companies have with cashflow, irrespective of things looking good in the P&L.  The answer is in your username.

As for your ludicrous example this has been covered earlier in the thread.
Report Java June 7, 2012 1:02 PM BST
"java whats up with you today? If you have a high turnover but you are losing money it means your outgoings are higher, payment terms are irrelevant"

Blackburn - we're going round in circles.  If I am in year 3 of a business and have managed to get a turnover of £1 million but am losing money because of sunk start up costs being amortised (for example) then I am still in a good position.

If you discount future projections of this business it will likely be far more valuable than a tiny profitable company.  Furthermore the bigger turnover business will have far lower risk to cashflow problems than the smaller profitable one.
Report Nocash June 7, 2012 1:04 PM BST
I am aware many companies have problems with cash flow. However you statement was profitable companies, this to me infers more cash flowing in than out...so no major cash flow problem.

The ludicrous example was intended to be ludicrous.
Report blackburn1 June 7, 2012 1:06 PM BST
java I'm sorry but you are miles out here.

If you start a company and are losing money in 3 years the bank will get jittery and you'll have problems with overdrafts etc. That means you cant pay suppliers and wages and then the problems really start.

With the greatest respect, it seems you have no idea how millions of SMEs are run.
Report Java June 7, 2012 1:16 PM BST
"I am aware many companies have problems with cash flow. However you statement was profitable companies, this to me infers more cash flowing in than out...so no major cash flow problem."

This statement is financially illiterate I'm afraid.......

Profit is calculated by recorded sales less recorded costs.

Whether the money is actually received from a sale is a irrelevant.  Yes you have bad debt provisions, but these may be insufficient, thus a company can become insolvent when it shows a profit in the accounts.
Report Java June 7, 2012 1:19 PM BST
"If you start a company and are losing money in 3 years the bank will get jittery and you'll have problems with overdrafts etc. That means you cant pay suppliers and wages and then the problems really start.

With the greatest respect, it seems you have no idea how millions of SMEs are run. "

Where have I ever said I'm relying on overdrafts?  Plenty of businesses have sunk costs which are funded from the original share capital.  Do you really think a loss making business in it's infant years is by definition not able to pay suppliers?

You seem to think I am arguing that a company can run at a loss continually.  I am not.  I am simply saying for a given year in isolation then turnover is more pertinant than profit, assuming the company is run on a rational basis.
Report blackburn1 June 7, 2012 1:30 PM BST
java, it is clear you have never worked in an SME let alone run one.

Lets imagine you and I start a business, j&b printers, we need £100k to buy a press and other equipment. This will be funded from a combination of our own capital and bank loan/overdraft. In the early days there is zero income so we dont draw a wage, we still have to pay wages/suppliers/rent/utilities and in the early days we wont make money. Hopefully sales pick up but theres no guarantee.

After 3 years if this continues you and I are in debt as we haven't drawn wages and the bank will realise we cant cut it so will call in the debt, which will probably be secured against our homes. The press we bought has depreciated and as a going concern the business has little value.

I've used printers, try restaurant, garage, wholesaler, whatever you wish. If banks see you losing money ie getting into more debt, you're phucked
Report Java June 7, 2012 1:48 PM BST
"java, it is clear you have never worked in an SME let alone run one"

This comments aren't helpful.  I've worked for small companies for the last decade in senior positions, and I can tell you for a given year we'd rather have significant ongoing/repeat business on the books in a given year than focus on turning a tiny profit.  Obviously over the medium term we need to show a profit over the entire period, but we are happy to sacrifice short term results for longer term benefit.

"After 3 years if this continues you and I are in debt as we haven't drawn wages and the bank will realise we cant cut it so will call in the debt, which will probably be secured against our homes. The press we bought has depreciated and as a going concern the business has little value."

You haven't read what I have posted.  Let's stay with your year 1 scenario, but assume that by year 3 we have boosted turnover significantly and projections are that these sales will continue to rise next year. We are making profits off these sales and drawing a salary.  However due to loan repayments, salaries and depreciation of the machine we are still showing a small loss in the accounts.

Can't you see this business is doing well even though it shows a loss in the accounts?  Why?  Because it's turnover is increasing year on year.  It is clear that this business will make a lot of money in years 5/6/7.
Report blackburn1 June 7, 2012 1:56 PM BST
java, I think our definitions of SMEs differ, I'm talking about the ones where the owners/directors secure the business against their own homes, running at a loss simply isn't an option. You work in the financial sector as I did for more than a decade; no plant, no suppliers, basic office space, no bad debts. My accountant and I laugh all the time when I say he only needs a pencil and a PC to run his business.

This is a massive problem the rest of the country has from people living and working in London, especially the financial sector, they are oblivious to the problems.
Report Java June 7, 2012 2:04 PM BST
well - I think your point actually backs me up.  If a financial firm is running at a loss in year 3 then you might well ask questions, but a manufacturing firm might have a lot of plant it bought day 1 and which is still depreciating in their accounts thus they may show a loss for a year even though they are actually improving significantly and are a highly viable business.
Report blackburn1 June 7, 2012 2:05 PM BST
Sigh
Report Java June 7, 2012 2:24 PM BST
Happy
Report flushgordon1 June 7, 2012 2:39 PM BST
java are you gideon in disguise?
Report flushgordon1 June 7, 2012 2:46 PM BST
by the by feck off comrades this thread is about lying politico scum.
Report flushgordon1 June 7, 2012 2:47 PM BST
no its about marty ,apologies and feck off.
Report Java June 7, 2012 3:10 PM BST
Grin
Report sibaroni June 7, 2012 3:59 PM BST
BB - the capital costs of a lawyer are many.  Premises, (remember we are usually in prominent positions), relatively highly paid support staff, insurance, professional subscriptions.  But most of all - your lawyers have to earn enough not to go elsewhere.

And as to profit cheese - you are very wide of the mark.  Profit is a lovely thing, but plainly a large part of the picture is turnover.  Profit and loss can be very misleading and often are intended to be. 

I don't personally think you can ever have run a business to state as you did, that profit is the main indicator of a business's value.
Report blackburn1 June 7, 2012 4:14 PM BST
BB - the capital costs of a lawyer are many.  Premises, (remember we are usually in prominent positions), relatively highly paid support staff, insurance, professional subscriptions

Yep, exactly the same as every other business. Of course most other businesses aren't funded by public money ie legal aid.

Solicitors are just hairdressers in suits but not as interesting or attractive
Report sibaroni June 7, 2012 4:17 PM BST
I have not done any legal aid for years and very few at my place do.  Very few lawyers do.
Report blackburn1 June 7, 2012 4:19 PM BST
Yeah but its all feeding on misery isn't it, death, divorce, planning disputes, its not as if you do anything useful like cut hair or fill teeth. People only use you because its illegal not to.
Report sibaroni June 7, 2012 4:36 PM BST
Its perfectly legal to represent yourself.  People use us because we do the job well.
Report blackburn1 June 7, 2012 4:36 PM BST
Im not sure thats true in every case, divorce etc
Report blackburn1 June 7, 2012 4:39 PM BST
And you dont do the job well at all, I kicked the arse off a barrister in court a couple of years back. The smarmy waste of space was phucking useless, disgraceful thing is he got paid for being useless by public money.
Report Nocash June 9, 2012 11:19 AM BST
Java     07 Jun 12 13:16 

Whether the money is actually received from a sale is a irrelevant.  Yes you have bad debt provisions, but these may be insufficient, thus a company can become insolvent when it shows a profit in the accounts.[/i]


I'll use another, admittedly ludicrous example. A company manufactures millions of widgets costing millions of pounds to produce. They sell these widgets to several companies, who. For whatever reason all fail to pay for any of the widgets received.

So by your reckoning even though the business has not received one penny, it is still profitable?

Your not an economist by any chance are you.
Report Java June 9, 2012 7:17 PM BST
It doesn't matter what I think.  The fact is the P&L for the year will be positive and you would say the company made a profit in the year.  The hit is only taken when the debts are written off (assuming they have made no bad debt provision).  This is exactly the point why annual profit can be deceptive.
Report The beauty of Buzzer June 9, 2012 9:09 PM BST
Since when has it been illegal to represent yourself brevikblackbun? Should those other misery feeders like doctors and nurses be chucked in the skip too?
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