Draft for Ciaran's read, not published

Learn · a beach talk

The warning signs business owners ignore, and what they cost.

Three years ago I had to run my daughters to a ballet class in Shanklin, seven miles away, in the middle of the summer holidays. My meeting overran, the kids were nudging, and when I turned the engine on I got the ping: low on fuel, 25 miles left. I had been ignoring that ping for about a week. The girls said there was no time for petrol, I did the quick sums, forty miles there and back against twenty-five in the tank, call it twenty, and said the immortal words: what could possibly go wrong?

Then the gauge started counting down. Twenty at Brading. Fifteen at Shanklin. Ten at a red light. Five in the lunchtime traffic at Lake. Then zero, at the bottom of the hill up to the heights at Sandown, crawling at two miles an hour in traffic, box breathing to slow my own heart rate, running every scenario in my head, because diesel engines do not forgive running dry. I made it over the top, rolled the mile down the other side going make it, make it, make it, and coasted onto the forecourt with the engine still running. The relief of a full tank, and of no pings for the first time in ten days, is hard to describe. So is the feeling of I got away with it, and I was not going to let it happen again.

The business translation, straight

Every part of that story has a cash equivalent, and I have watched all of them.

• The ignored ping is the cushion sitting under a month while everyone is busy with sales. The alarm is polite. It repeats. It is ignorable right up until it is not. Your cushion in months is the fuel gauge.
• The quick optimistic sums are the mental arithmetic owners do instead of looking: "the big invoice will land before the VAT quarter". Sometimes it does. The gauge does not care about your optimism, it cares about timing.
• The countdown is what a thin cash position does under normal life: a slow payer, a red light, a bit of traffic. Nothing dramatic happened on that drive. Ordinary delays drained an ignored margin.
• The hill is the moment you have no options left: mid-payroll, tax landed, nowhere to pull over. Every choice available at 25 miles was gone at zero. That is the whole economics of warning signs: the same problem costs pennies early and everything late.
• Range anxiety is what running a business without a visible gauge feels like: the low-grade stress of not actually knowing. The fix is not courage, it is a dashboard you look at weekly.

So the question I ask owners

Have you ignored the warning signals for seven or ten days? Have you driven past the petrol station with the immortal words, what could possibly go wrong? Not with fuel. With cash. If there is an alarm you have been dismissing, the honest move is to look at it today, while the number on the clock still buys you options. And if part of the problem is that your business has no fuel gauge at all, that is a fixable problem: work out which of the five cash positions you are in, then watch it weekly. One adviser's note for the bookkeepers and FDs reading: being the ping that does not get ignored is most of the job; a weekly number in the client's inbox is harder to dismiss than a quarterly meeting.