Mitigating against possible future lockdowns

[roger440]

I know we are all trying to deal with the effects of the current lockdown, but what of the future?

Like most i suspect, planning for the arbitary loss of business as we have experienced is just simply something that we never considered. No one would have believed it was possible.

Whilst there is a clear body of opinion, that no way would the government do it again, im not so sure. Id suggest at the signs of, for example, a serious flu pandemic, public pressure will be such that the government of the day, will cave in to public pressure and do similar again. To not do so will have them accused of all sorts of crimes, genocide etc.

So, does anyone accept that this is a realistic possibility? And if so, what do you do to mitigate against a catastrophic loss of income?

I understand that its not possible to insure against such a loss of income, so what possible measures can you take?

[MYOB]

Truly, after today's news that there is a 20% drop in the economy just for April, I seriously doubt there will ever be another lockdown.

As for mitigating measures for businesses, they would be specific for certain sectors. On the whole, I imagine the best thing to do is build up a cash reserve.

[VEX]

I definitely think something like this is going to happen again. We are such a worldwide travelling population now that without serious change to business habits it will happen.

Different strain, totally different virus, the depth of 3rd world finances etc.

So anything I/we/businesses can do to mitigate the impact will make a difference.

I am moving to an e-commerce model and the a subscription based services going forward. One good thing for Covid is having the time to actually put this is place. None of these ideas would ever have happened.

V.

[Simpo Two]

VEX said:

I am moving to an e-commerce model and the a subscription based services going forward. One good thing for Covid is having the time to actually put this is place. None of these ideas would ever have happened.

I certainly remember thinking 'Thank heavens for Amazon'. I bet they've done well from it.

[Algarve]

roger440 said:

I understand that its not possible to insure against such a loss of income, so what possible measures can you take?

Stop frivolously wasting your money in good times to be more prepared for the lean times would be the biggest thing for most of us I think.

Looking back now there's a lot of things I've bought over the last year or two that I wish now didn't exist and were back in my bank account.

[singlecoil]

Finding ways of managing with less/no staff would be a good start, and keeping fixed outgoings to a minimum.

[roger440]

singlecoil said:

Finding ways of managing with less/no staff would be a good start, and keeping fixed outgoings to a minimum.

This is the obvious one, but we cannot get by without a warehouse. Without it there is no business.

Rent and rates are the big ones.

[carreauchompeur]

I don’t think the economy could stand another lockdown... I have absolutely no idea how the stratospheric cost of this one will be covered!

[roger440]

Algarve said:

roger440 said:

I understand that its not possible to insure against such a loss of income, so what possible measures can you take?

Stop frivolously wasting your money in good times to be more prepared for the lean times would be the biggest thing for most of us I think.

Looking back now there's a lot of things I've bought over the last year or two that I wish now didn't exist and were back in my bank account.

I definitely dont fall into that camp, but your suggestion isnt realistic. At a personal level, yes, but at a business level, not so much. If we take the current situation of 3 months lockdown, and lets say optimistically, 18 months to get back to where we were, there is simply no way that we can generate and retain enough cash to cover for that sceanario.

Thats the reason i asked the question, as i dont see an answer?

[Hoofy]

Be capable of doing it online. But also be capable of doing it offline if technology lets you down. Someone could design something that destroys servers in the UK even if it's just for a week. Could your business survive without the internet for a week? Remember when the NHS went down due to a computer virus?

[singlecoil]

roger440 said:

singlecoil said:

Finding ways of managing with less/no staff would be a good start, and keeping fixed outgoings to a minimum.

This is the obvious one, but we cannot get by without a warehouse. Without it there is no business.

Rent and rates are the big ones.

Is it a warehousing business, or is the warehouse where you need to keep the stock which your business needs?

There's nothing in your PH profile to show what sort of business you are in.

[untakenname]

When they realise that the year on year death toll this year won't be that different (44k excess winter deaths in UK from flu in 2014) from other years people will demand to know why they have ruined the economy for the next decade and caused devastation for millions of working age adults.

They say Austerity was responsible for 120k extra deaths in the UK and this is 10x worse so we are potentially looking at the economic damage killing over a million!

[roger440]

singlecoil said:

roger440 said:

singlecoil said:

Finding ways of managing with less/no staff would be a good start, and keeping fixed outgoings to a minimum.

This is the obvious one, but we cannot get by without a warehouse. Without it there is no business.

Rent and rates are the big ones.

Is it a warehousing business, or is the warehouse where you need to keep the stock which your business needs?

There's nothing in your PH profile to show what sort of business you are in.

Its the later.

[roger440]

Hoofy said:

Be capable of doing it online. But also be capable of doing it offline if technology lets you down. Someone could design something that destroys servers in the UK even if it's just for a week. Could your business survive without the internet for a week? Remember when the NHS went down due to a computer virus?

We are already online. It still took a huge hit. Sadly we dont sell food!

But yes, we could survive without for a week.

[roger440]

untakenname said:

When they realise that the year on year death toll this year won't be that different (44k excess winter deaths in UK from flu in 2014) from other years people will demand to know why they have ruined the economy for the next decade and caused devastation for millions of working age adults.

They say Austerity was responsible for 120k extra deaths in the UK and this is 10x worse so we are potentially looking at the economic damage killing over a million!

Thats really for another thread, and using logic, you are right. But....................................

[Jakg]

Hoofy said:

Be capable of doing it online. But also be capable of doing it offline if technology lets you down. Someone could design something that destroys servers in the UK even if it's just for a week. Could your business survive without the internet for a week? Remember when the NHS went down due to a computer virus?

Is that a sensible precaution to take? Your customers won't be able to get any money and your suppliers won't be able to get you anything - what is your contingency supposed to be?

Planning for extreme global events might seem obvious in hindsight - but maneuvering with the weight of all those contingencies will be very difficult.

[singlecoil]

Simple answer is that there isn't a simple answer. What answers there are will vary from one type of business to another.

It's impossible to make suggestions etc without knowing something of the nature of those businesses.

[StevieBee]

carreauchompeur said:

I don’t think the economy could stand another lockdown... I have absolutely no idea how the stratospheric cost of this one will be covered!

Money is continuing to flow into bank accounts but not out of them. It's the flow of money that determines the health of an economy rather than the amount of money that's in it. Unlike in 2008 when banks physically ran out of money and stopped lending, that isn't the case here. The money the government is using has largely come from several emergency funds set up after the second world war (IIRC) so there's actually more money out there than there would be naturally but because of the inability to spend it, it's just sitting there. The theory is that once normality returns, confidence will return and the money will flow and flow in greater amounts. This is why many are predicting a very healthy bounce back and why the government is being as generous as they are.

However, as you say, a second lockdown would be a different matter entirely. This one has been painful. A second would be catastrophic.

[carreauchompeur]

Interesting thanks, didn’t know that

[Hoofy]

Jakg said:

Hoofy said:

Be capable of doing it online. But also be capable of doing it offline if technology lets you down. Someone could design something that destroys servers in the UK even if it's just for a week. Could your business survive without the internet for a week? Remember when the NHS went down due to a computer virus?

Is that a sensible precaution to take? Your customers won't be able to get any money and your suppliers won't be able to get you anything - what is your contingency supposed to be?

Planning for extreme global events might seem obvious in hindsight - but maneuvering with the weight of all those contingencies will be very difficult.

As singlecoil says, it depends on the business. I can only figure it from my business perspective.

I would ask myself these questions:
-what disasters could affect my business?
-how could they affect my business?
-what do I want to continue to be able to do in the event of a disaster?
-what can I do to reduce the effect of the disaster?
-how badly can I let things get without it being a problem?
-what other questions do I need to ask myself?

Personally, I always make sure that I have savings but I am now able to plan and pivot more easily than before. As a result of my approach and my particular business, I'm probably making as much money as I was before but in a different but related way. When we go back to how things were, I will be able to continue with my current activities and do the old activities so will be in an even better place financially. This crisis has given me the inspiration and motivation to do things that were only ever in the back of my mind as ideas. I'm not gloating because I know that many people are fked. I've just made a positive out of a terrible situation. (And maybe 5 years or 10 years ago, if this had happened, I'd probably be fked, too, as I didn't have the knowledge or experience that I did to help me 3 months ago.)

Edited by Hoofy on Monday 15th June 12:15