Good supplier relationships will get you through tough times

In 2008, the financial crisis posed significant challenges for businesses, particularly in maintaining credit and cash flow. The speaker describes how their company, despite being profitable, faced difficulties due to the credit crunch. They had to find a million pounds in cash flow within three months. The solution involved reverting to previous business practices, such as personally managing supplier relationships. By leveraging trust and honesty with suppliers, the company was able to maintain credit terms and continue trading. This approach not only helped them survive the crisis but also strengthened long-term relationships with suppliers.

What was a major challenge faced by businesses during the 2008 credit crunch?

• Increased demand for products

• Overproduction of goods

• Difficulty in obtaining credit terms

• Excessive cash flow

How did the company manage to address its cash flow issues?

• By stepping back to previous operational levels

• By increasing product prices

• By acquiring new businesses

• By reducing the workforce

What role did long-term relationships with suppliers play during the financial crisis?

• They resulted in higher interest rates

• They allowed for immediate payment demands

• They enabled the company to secure better credit terms

• They led to increased competition

Why were the suppliers willing to continue delivering stock to the company?

• The company offered higher prices

• The company had a history of honesty and timely payments

• The suppliers had no other clients

• The suppliers were legally obligated

What was a key outcome of the company's approach to handling the crisis?

• The company lost all its suppliers

• The company faced legal issues

• The company built stronger long-term relationships

• The company had to close down