Well known names with problems?

[MrPete]

Although I'm the first to admit I personally don't have the best mindset for running a business (hence I don't!), surely a lot of the problems we are seeing are due to badly run businesses, whether decisions have or have not been made, not paying self-employed/freelancers/contractors or any other bad business decision?

But like anything these days, it's not just going to be because of one thing - ie. the recession - it'll be because of a series of errors, I would have thought :P

[David Bulley]

Sorry to hear about anyone who is owed money by these guys. We were hit last time and it's rather annoying as a company, never mind as a freelancer...

 

As an employer of freelance guys, I do wonder why those in the freelance world carry on working for perennially phoenixing companies?! We are always on the look out for good freelancers so please get in contact with us @ DB if you are looking to work for a company that appreciates freelancers who are prepared to work as a team with our guys, get in amongst it on occasion, but who will get paid.

 

Cheers,

 

David

[Guest lightnix]

...surely a lot of the problems we are seeing are due to badly run businesses, whether decisions have or have not been made, not paying...

The problems we are seeing with individual companies, are a result of wider problems within the business IMO; e.g. oversupply and a general difficulty in marketing goods and services on anything other than price :P

[Pete McCrea]

.....surely a lot of the problems we are seeing are due to badly run businesses, whether decisions have or have not been made, not paying self-employed/freelancers/contractors or any other bad business decision?

 

It can be. And maybe not getting the cash out of people is part of being a badly run company. If the accounts are run properly, then it should be harder to get in to big problems.

 

But if a large company owes you a large sum, then decide not to/can't pay, coupled with VAT being due, things could mount up very quickly, and where a company could be considered as well run, it could easily find itself in bother. Coupled with banks withdrawing overdrafts things could go from OK to failed in a few days.

 

Then some of these larger companies have a reputation of effectively being owned by the Banks and always trading close to the wind. They are reputed to need the turnover, hence the low prices simply to get the cash through the door to feed the monster that is the black cash hole. However this doesn't maintain the industry or do the other companies any favours by undercutting.

 

It's these 'difficult times' that mean companies need to be on top of their credit control, and keeping an open line with the Bank manager so if things do go wrong they can help them through it.

[slim_mcslim]

Quite frankly it is a year with an even number this means psl will go bust... I wouldn't be surprised if PSL 2008 wasn't up and running already with the project managers sat in a newly rented office looking through company car catalogues wondering what they should get now from their new company.... I stand to be corrected but they went tits up in 2006, 2004, 2000 and 1996 didn't they ?

 

P.

[floppy]

From what I've heard they are setting up as Presentation Services London and are looking for freelancers!

[karl]

surely a lot of the problems we are seeing are due to badly run businesses, whether decisions have or have not been made, not paying self-employed/freelancers/contractors or any other bad business decision?

It depends what you mean by bad decisions, some company managers do seem to do stupid things like persist in following business patterns that are obviously flawed in the hope they will suddenly start working. Other decisions may have seemed perfectly sensible at the time but have been overtaken by subsequent events.

 

I'm no expert but I'm sure I heard somewhere that the biggest cause of business failures is cash flow and times like these are the perfect circumstances for this to strike. Imagine a company eighteen months ago that is doing good business and needs to expand to meet demand. They borrow money to be able to acquire bigger premises, hire more staff and buy more equipment. Theoretically they can now do more business thus making more money which will pay off the loan.

 

WHAM - the credit crunch hits, demand drops off, banks get jittery and start calling in loans or putting interest rates up. Suddenly income isn't sufficient to service the loan taken for the expansion program. You can't downsize the premises or stock because nobody is buying and if you reduce the staff you reduce your ability to generate income. Classic catch 22 and the business is going one way - down the tubes.

 

Is it anyone's fault? Well maybe they shouldn't have tried to expand so fast but then people always say 'you have to speculate to accumulate' and who could have foreseen how quickly things were going to turn bad.

[Derek Tallent]

According to the AV Magazine website, PSL went down due to allegedly being defrauded to the tune of £380,00 by their finance director:

 

http://www.avinteractive.co.uk/news/857900...-alleged-fraud/

 

and SPS went bust because the banks would extend any more credit:

 

http://www.avinteractive.co.uk/news/857185...administration/

 

It's going to get even tougher over the next few months, and I wouldn't be surprised if we see a few more companies in our industry disappear, large or small.

[Pete McCrea]

More information on PSL(London)

[Peter F]

More information on PSL(London)

 

Just to make it clear, do PSL freelancers who are owed money from the now defunct company stand any chance of getting it?

[Guest lightnix]

Just to make it clear, do PSL freelancers who are owed money from the now defunct company stand any chance of getting it?

The best people to ask about that, are probably PSL(L) :D

 

Is it anyone's fault? Well maybe they shouldn't have tried to expand so fast but then people always say 'you have to speculate to accumulate' and who could have foreseen how quickly things were going to turn bad.

Or maybe the industry as a whole should wake up to the fact, that it can't keep doing jobs for the same price, every year, ad infinitum, without there eventually being some kind of negative outcome.

 

A warehouse manager for a large hire company summed it up very well a few weeks ago, when (in so many words) he said...

 

"The problem is: Back in the last recession, everybody more or less cut their prices in half, just to keep the work coming in through the door and have not built them back up since then; because they've allowed themselves to be continually bullied by clients bleating, 'Well you did it for that price last year, you did it for that price last year, you did it for that price last year', year in, year out. Now that the sh*it's hitting the fan again, nobody has any reserves to fall back on; because as it is, they've pretty well been living hand to mouth, for the last 15 years or more".

 

Five or six(?) years ago, there was a discussion at PLASA, about the damage that low prices were doing to everyone; but then everyone just went back home and carried on as they had been. As I said before: Companies have got so used to marketing themselves on price and price alone, that they now find it almost impossible to do it any other way.

 

It's all very well banging on about people's tired old kit; but with prices as old and margins as low as they are, just how the hell can companies be expected to continually invest, literally hundreds of thousands (if not millions) each year, in the very latest gear?

[JDP]

Five or six(?) years ago, there was a discussion at PLASA, about the damage that low prices were doing to everyone; but then everyone just went back home and carried on as they had been. As I said before: Companies have got so used to marketing themselves on price and price alone, that they now find it almost impossible to do it any other way.

 

It's all very well banging on about people's tired old kit; but with prices as old and margins as low as they are, just how the hell can companies be expected to continually invest, literally hundreds of thousands (if not millions) each year, in the very latest gear?

 

I do partially disagree with that, Nick. Whilst a lot of companies continue to do things on the 'cheap', PSL, PRG and other similar companies being prime examples of that. There are a LOT of companies who don't, they charge the right price for the to keep everything in tact and pay their crew properly and are a pleasure to work for, First Network, Essential and Neg Earth are good examples of those kinds of companies. In fact I am sure its no secret, but Neg Earth only have 3 years to go on paying off their warehouse mortgage! This is some £3.5M of warehouse plus land in a very built up and important area of London, pretty remarkable considering it was 'bought' and built in 2003!

[JazzAV]

The key thing to running your own business is Say what you are going to do and then do it. If I tell a freelancer he will be paid in 30 days, I pay him in 30 days..or else I would be a liar. if I cant pay him (never happend but if..) I would phone him and tell him when I will pay him and I would pay him then.

 

Bottom line if a company tells you they will do something and then they dont, get very worried very quickly.

[stringman]

Just to make it clear, do PSL freelancers who are owed money from the now defunct company stand any chance of getting it?

 

if they are lucky they will get about 6-10p in the pound though when they folded last time (starting to look like an origami plane with so many folds!!) I got the grand sum of diddly squat!!

 

I have just received the documents from grant thornton regarding the demise of sps

the figures owed to various people and companies is fairly outstanding!

 

I am not expecting any payment at all on that one.

The biggest creditor is the bank - I think they get first dibbs on any cash.

[JDP]

The thing that shocks (and infuriates) me about this is that they have done this, screwed a LOT of freelancers over, and suddenly they open up as PSLL (a new PSL) and are trading again. I know that PSLL are doing at least one event previously done by PSL in years before...

 

Depending which versions of bankruptcy the courts see fits the image, you CAN sometimes be struck off as a company director and not allowed to become a director for a period seen fit by the courts. Why, if PSL have had to many bankruptcies, which is at least 3, are the same directors allowed to re-start other companies. Its the exactly same directors of PSLL than it was PSL - so with PSL's and the Director's track record of at least 2 previous bankruptcies of the same companies are they allowed to keep doing it.

 

The whole point of the courts and the law about being struck off as a company director is to stop freelancers and companies from being ripped off, and its not happening....