EOW Reflections 21/07/2023

‘It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you’ll do things differently.’ Warren Buffet.

Hundreds of businesses have fallen by that sword over the time I’ve been writing and broadcasting about business. But history shows we human beings rarely learn from the mistakes of others. As we saw in the press and media this week one of the easiest ways to ruin a reputation in business is to fail to pay small suppliers fairly. I list late payments as unfair but giving suppliers contracts that allow you to pay them months after they’ve delivered the goods, or to withhold their hard-earned money, and in effect, use that to bankroll your own business, is unfair too.

My first reaction when I hear of companies paying poorly is to assume they’re in financial difficulties. If that’s not the case, why would you risk your reputation as a good company to work with? Firms behaving badly aren’t new. They’ve had songs written about then, seen suppliers take their goods and services off to the competition, lost their investors and employees. At best it’s taken years to rebuild a good rep. At worst, loss of reputation has caused firms to go bust. Whole sectors have been tarnished by the loss of reputation of one company. Journalists and broadcasters fill hours of airtime and acres of print with stories of poor behaviour. They’re not ruining your reputation. They’re reporting on your bad behaviour and you’re ruining your own reputation for being good to work with, all by yourself.

Increasingly customers, despite the cost-of-living, crisis want to deal with ethical firms, doing the right thing, proving that they’re trustworthy. Investors are taking the same line. Pay up, pay quickly, and make decisions based on keeping your hard-won reputation for being reputable and trustworthy intact, even when the times are tough.