Pop goes the Weasel

That annoying nursery rhyme refrain literally popped into my head the other day. It was prompted by the collapse of a friend’s business into liquidation.

Paul had started his business some ten years ago and had enjoyed steady, profitable growth over time to create a very healthy business turning over around £1m a year.

In common with many, he’d started a business in a sector he knew, where he had existing contacts and a good reputation. Redundancy had prompted the start-up and right up until recently, his enterprise was a fine illustration of ‘how to do it’.

So what went wrong?

It’s quite simple. He was offered and accepted a single contract that more than doubled his turnover.

Resources were stretched and deadlines missed as everything was focused on the new, big contract. He ran out of cash as a result and that was that.

Which brings me back to that line; ‘pop goes the weasel’.

It is said to originate from London’s East End where to ‘pop’ was to pawn something and a weasel was a mispronounced whistle (as in whistle and flute – suit’).

Each verse of the rhyme goes through some financial excess which results in the inevitable pawning of the suit – popping the weasel.

The trouble with business is that getting over a cash flow crisis is not as easy as slipping down to the pawnbroker.

Once the warning bells sound the ship soon sinks, taking your investment and your future dreams with it.

Next time you’re tempted to take on more than you can realistically handle, think of that old nursery rhyme and heed the warning it contains.

Big does not always mean better

and the bigger you get the tougher it is when cash flow goes bang!

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