It was 1995. It was the Christmas period. We closed the office and I was having a holiday. I was travelling around Syria, which you could in those days, and was not easily contactable (no mobile phone, internet etc then).

So the first I’d heard of my impending company disaster was late at night when I got home in the new year. There was a fax from Sarah, one of my staff. It simply read “Athena gone bust. Sorry.”

I instantly knew the gravity of this. Athena were our biggest customer by far, and by going bust at Christmas, it was the perfect storm.

All of our Christmas cards and calendars would go unpaid, as would the new cards we’d already delivered for the new year. Oh, and then there was all the Valentines cards too.

My heart sank. Could we survive?

As it happens we did, just ! It was both the worst time and best time. You see, a handful of months earlier we’d launched, what was to be, our best selling range of cards to date. And even though I’d only just employed a sales manager to help, the huge bad debt and extra salaries were covered by a press on the accelerator to get in more sales turnover.

It wasn’t pretty, but we survived it, and nobody lost their job.

So, what did we learn?

Mainly it was to reduce the ridiculous payment terms that Athena had then. Ninety days end of month for payment, simply wasn’t sustainable for us. You need to understand it’s a negotiation, and never negotiate anything that you’re not afraid to walk away from. Those payment terms were just too much for us, and there’s an argument to say that any business that asks for that are fundamentally flawed, so be careful. And then, obviously having any one big customer that we were exposed too, was frowned upon by us.

Have there been other bad debts along the way? Yes, of course, but none as big as that one, and most of them we could see coming. You could insure your debts of course, but for the vulnerable companies you may be supplying it can be so very expensive to insure against, as makes it hardly worth it. And the ones that are cheap and easy to insure against, well why bother ? The insurance companies are always well ahead of you, and they know their stuff.