Thursday, 13 July 2006

Another one bites the dust

So yet another builder bites the dust. LEES Narrowboats went into liquidation this week. Many good people have lost an awful lot of money and why? Because financially unqualified people set them selves up as builders and fail to run a proper business.

Business is very demanding. It is not something that you can take a half assed try at. It requires all of your attention and all of your wits to be a success. It makes no difference if you are a superb builder it's the project planning and the financial management that will make or break you. It would seem that LEES along with HERON & EDITOthers were sadly lacking in the important stuff.

So where to from here. I think there has to be a licencing of builders, all their business plans need to be audited before they set up business and regularly thereafter. A prospective purchaser needs to see a solicitor to look over the contract and they need to employ a surveyor to oversee the build. Every time money changes hands there should be a corresponding certificate of ownership of that work which has been completed. Not just a scrap of paper knocked up in the workshop, but a duly notarised document. Nobody should be expected to stump up £60,000 without proper legal protection. Obviously the boat building industry cannot regulate itself so it's time for the Government to step in.

The idea of a limited company law that protects the builders home while he has incompetently lost the homes of many is a situation that has to be stopped. The industry has had a lot of knocks of late. And action is required to stop the rot.

All builds should have to be insured against loss by the builder. Proven before the contract is signed. This should help to tidy up the business that has failed to sort out itself. Financial management of each project(boat) could be carried out by the insurance companies.

A public auditor should be able to enter a premises to check the books without notice. At least one member of the management team should hold certificates to prove his competence to manage the finances of the enterprise.

If necessary an external financial organisation should be set up to manage deposits and stage payments. No money to change hands until legal ownership of the stage is confirmed. This would include proper transfer of ownership papers for the hull to the buyer and not to the builder. There is no justifiable reason for the builder to own a hull that he didn't build. If it is his build there is no reason for him to keep ownership after he has finished building it.

Until such devices, or similar, are in place no one should be allowed to set up as a builder.
Anyone got any more ideas?

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