They say most companies that go bust do so for cashflow reasons. I’ve always found that a little strange. I am quite sure most of them do indeed go bust because they run out of cash; I suspect that many of them go bust less because of poor cash management than because of poor strategy, planning or implementation.

The hardest thing when something is going wrong is to know when to keep supporting it, and when to let it go. This issue is at the front of my mind at the moment, because three of the businesses I’ve invested in have turned the corner and started to make sensible profits in the last quarter. One of them is pretty much on track, the other two are later than expected. With both the late developers, there were shareholders who lost faith and gave up on them, as well as others who hung in. I hung in as a supporter of both, but there were days when I suspected I’d got it wrong. It’s a wonderful feeling to have turned the corner, and be able to look back.

It applies equally to sales people. We recently took on a sales person who lacked relevant experience but displayed real hunger, and impressed us enough to merit a try. By the end of the three month probation, the sales person had not made a sale and I lost confidence. My sales director stuck with his original hunch, though, and we left it another few weeks. It worked. This sales person has gone on to become highly successful for us – and I nearly threw it away. Two years previously, a very similar situation had resulted in several more barren months, and in the end a termination fee.

I wish I had a magic one-size-fits-all formula to predict which way these things will work out. All I can do is stick to the basic premise that, whatever the past, do I think that the future is worthwhile? Is another month or two, at whatever cost, likely to yield the success we seek?

On a very different note, we received today a bill from a supplier for late payment of four invoices in early 2003. The invoices had all been paid within six weeks of the invoice date, which is considerably faster than we get paid by many customers. It’s a supplier we no longer deal with. The supplier is claiming £40 per invoice as a fee, together with about £30 interest. It makes me mad. Ordinarily I’d ignore a try-on like this, but they are citing their statutory right to fees and interest. I was not in favour of the statutory right to interest when it came in, since in my experience issues like that have far more to do with relationship than law. If a major customer is two weeks late with their payment, we’re unlikely to get heavyhanded and risk souring a good relationship. I’ve always found a quiet word and regular contact more than sufficient for worthwhile customers. So a law that was designed to help businesses like ours has now created a problem for us. If we ignore it, it could end up in court with stupid costs. Telling a supplier you no longer deal with to stop being such a prat is unlikely to work. Yet paying the bill feels utterly wrong.

I am fed up, as I know many of you are, with a legal system that enables miserable sad people to get away with not paying small bills yet which punishes businesses that are successful. It barely seems worth suing anyone for less than about £10,000 these days, with the small claims court a virtual lottery in our experience.

One of these days, I might be able to spend a full day on building my business, uninterrupted by nonsense like this – but it doesn’t feel likely. In business, there always seems to be something unexpected just around the corner.

David Lester, founder of Crimson Business, has established or run half-a-dozen businesses, as well as advising others.