You know you are too old for a recession when you measure how well we are doing not by profit versus loss, but by the speed at which we are approaching the abyss. It really does not matter, because whatever the scenario, things are still getting worse. Yet somehow the financial sector seems to think they're improving because they are not getting worse as quickly as they were. I've never known a gardener who boasts about how good he is because his plants are dying less slowly than they were a year ago, but it appears that we are to applaud the fact RBS has made a profit because it is losing less than before, after, like all banks, hanging UK construction PLC out to dry.

So what do we specialists need to do to safeguard our futures? Well, cash is all that matters. And to that end, I have three pieces of advice.

Too many of my clients have continued in business because they used income from projects to pay for losses on past contracts and kept widening their supply chain. Do not fall into this trap. When recessions hit, orders dry up, and there is nowhere to get new funding to replace the old. The contracting house of cards comes down.

Also, when you see the signs of this happening, don't threaten court action. I remember phoning a contractor to whom I had provided mouldings for a ballroom to say that unless he paid me I would take him to court. His answer was: "That will just add another three months". I did. He was right. He went bust and we got nothing. Every time I see the project now, I am sad that although the client probably paid for our works, we got nothing. Arbitration or adjudication are fine where the dispute is between two well-funded litigants who have the ability to pay or not to be paid, but useless either when the payer cannot pay or the payee cannot afford not to be paid. So forget using the courts.

Last, but not least, insist on cash for private jobs. I always do, then the client starts sweet talking me, and I get carried away with their enthusiasm and give them credit. Fatal! Be assured by a cynic that if a private client asks for credit, they are not worth it. An example is one of my jobs on which I am owed more than £30k - I was taken for a fool by a Mr and Mrs Client, who did not have the wherewithal to pay their bills. They are now subject to bankruptcy proceedings.

So my advice is simple. Cash is king.

Take a loss rather than extended terms, never employ solicitors or the courts and never give private clients credit. Have I listened to my own advice? Of course I haven't. If I had my companies would not have experienced £1m of bad debts in 20 years and I would now be on a beach in the Bahamas instead of penning a blog for Building. This year our bad debts have already passed the average annual figure and sadly I think that they have further to go ...

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