IT'S amazing how much money a business can make by subcontracting work to outside suppliers.

Armed with no more than half a dozen desks and telephones it is possible to run a mighty enterprise.

I heard recently of a one-room office in Dorset that was turning over nearly £2 million a year, and there are probably other firms achieving far more even than this.

It rarely makes sense to do everything in-house. A business can punch well above its weight when it uses other firms' equipment and expertise while it concentrates on what it knows best.

This works perfectly nine times out of 10, but using outside suppliers can be fraught with danger.

Get it wrong and your reputation can be destroyed overnight - just ask British Airways.

BA's summer has been badly disrupted thanks to a strike by employees at its catering supplier. Its image as the "world's favourite airline" has been shattered.

Everyone in business should draw lessons from the Gate Gourmet debacle. Top of the list is how vulnerable a business is when it relies on a single supplier.

Next comes the danger of driving prices down to the point where a supplier finds it hard to survive.

Tempting though it is to dump all your problems onto a supplier and walk away, it makes more sense to keep a close eye on progress.

After all, it is your customers who will suffer if things go wrong and you will be one they blame.

British Airways' problems and disruption to flights in the busiest month of the year demonstrates how difficult life can be for the great national carriers in the era of cut-price flying.

The dispute looked like a return to the bad old days of the 1970s, when antiquated working practices, militant trade unionism and a failure of management and staff to communicate conspired to create mayhem.

No one wants to see that time again.