Impact. It’s a hard word. It’s onomatopoeic. It sounds like it hits you.
Where am I going with this? That’s the thing about reflections. Sometimes when I start reflecting, I’m not sure where I’m going to end up. That’s how it is today.
We have a case ongoing at the moment. It’s heartbreaking. There’s a small business involved, teetering on the edge of the insolvency abyss because of missing and delayed payments. We’re doing our best to stop the worst coming to the worst. But sometimes even we get caught up in the process when it’s the impact that really drives home the reality.
We asked the business owner for an impact statement. There’s a small business that’s taken years of blood sweat and tears to build up, a family that’s had a fair income from that business and felt secure, a business that’s been able to contribute to employment, to community and the economy and it’s all at risk. Everyone on whom this has had a positive impact so far will experience the reverse, negative impacted if that business fails.
Usually when a small business fails there’s no impact statement. It appears as if it’s just a number. Take the latest insolvency figures: there were a total of 6,342 company insolvencies in England and Wales in Q2 2023 according to the Insolvency Service. How often does anyone calculate how many people those insolvency figures really affect beyond the unemployment numbers or the impact on the economy, the welfare benefits bill and the tax take?
The reality is there’s the boss and family, and the employees, their families, including wider family member supported by those incomes. There the reduced capacity to spend money in the local economy such as small cafes and shops, and to contribute to local charities. There’s the personal impact on all of the people losing money because of this one small business going to the wall: the sleepless nights, the lost homes, the homelessness and relationship breakdowns, the mental and physical health problems that come from loss of security, identity, the anxiety about getting back into employment, having the right skills for a new job, how to keep the children clothed, fed and at school, the anxiety of the children seeing the impact on parents. I could go on. That’s the tip of the iceberg.
The reality of the impact isn’t usually discussed beyond the people who are directly affected when the business is ‘small’. And if people don’t talk about it because of shame and embarrassment, not wanting to be a burden, stigma, that makes the impact harder to bear. We need to think about the wider impact of these events, catastrophic for the people closest but also for those caught up in the ripple effect.
But the non-payers don’t necessarily go unscathed. They may lose suppliers and as a result may lose customers. They may gain a reputation for being poor payers and lose a reputation, possibly built up over years, for being an ethical firm. The impact of all that could ultimately be another loss of a bigger business with even more people caught in the ripples.
We’ve got to start measuring the real impact, the reality of the consequences of our actions, positive and negative. Without understanding impact, we can never know what we’re really achieving or the damage we’re causing.