If it gets that bad, how long will your business survive?
Discussion
Mrs B&B has been suitably scared by the gloom and doom on the BBC and has started to worry about how long we can survive if the economy takes a nasty dive and starts to impact the public sector where the vast majority of our work lies. If things get tight there, they are more likely to simply stop doing certain things completely, not just buy less (e.g. managemnet training, promotions, developing new systems) or do things in-house (badly). She started to pick over the invoices asking how much we paid people and whether we could stop doing that. As a result she had me totting up our personal and business resorces ( we are a 2 person band with a net work of associates we bring in) to predict what would happen if business dried up by half or completely, and to work out how long we could live off the cash/investments we have, and the business reserves.
I don't have a mortage kids or kids at uni, and the business runs from a spare room with minimal overheads if no work is coming in (account and insurance being the largest). I think we could survive 2 years or so with no income and perhaps 4 years or if we have a 50% downturn. I know people in my business who won't survive beyond 12 months simply because they have more outgoings and rent office space/have staff.
Has anybody else done the same calculations and how long can you last?
I have heard people say that those who do survive will be in an even stronger position on the other side. That seems to be our strategy: nail down the hatches, trim the overheads, no new speculative and expensive research or products which require anything more than time invested, and keep looking for green shoots.
Are others intending to sell or invest their way out, hibernate, pray or cut costs?
I'd have thought with a lean operation like that you're in a good position to win new business away from competitors.
That's what I'm finding. In a recession, customers are more likely to shop around for someone that can offer a better deal.
Having said that, I wish I had a crystal ball as to how bad this recession will be. My lease is up for renewal in June, and that will be a £400,000 personally guaranteed commitment from me if I renew.
I *know* it will be more profitable for me to operate just like you, from a back room, and outsource all my manufacturing. I'm seriously considering it, but then I lose all control over the actual manufacturing and 10 jobs would be lost. And there goes any thought of future growth once the economy turns again.
Testing times for all of us. At least we're not burying heads in sand, which is what many people are doing.
That's what I'm finding. In a recession, customers are more likely to shop around for someone that can offer a better deal.
Having said that, I wish I had a crystal ball as to how bad this recession will be. My lease is up for renewal in June, and that will be a £400,000 personally guaranteed commitment from me if I renew.
I *know* it will be more profitable for me to operate just like you, from a back room, and outsource all my manufacturing. I'm seriously considering it, but then I lose all control over the actual manufacturing and 10 jobs would be lost. And there goes any thought of future growth once the economy turns again.
Testing times for all of us. At least we're not burying heads in sand, which is what many people are doing.
Our business has had huge peaks and troughs. At one stage we had to plan on lasting the best part of a year - both personally and as a business. This is because our sales tend to be few but very, very large. A sale takes a long, long time to brew (as it were) but is often a large commitment for our customer.
It isn't great and I wish it wasn't like that but it is.
When 9/11 happened we had no worthwhile business for a year. Now that was s
t.
It isn't great and I wish it wasn't like that but it is.
When 9/11 happened we had no worthwhile business for a year. Now that was s
t. Don said:
Our business has had huge peaks and troughs. At one stage we had to plan on lasting the best part of a year - both personally and as a business. This is because our sales tend to be few but very, very large. A sale takes a long, long time to brew (as it were) but is often a large commitment for our customer.
It isn't great and I wish it wasn't like that but it is.
When 9/11 happened we had no worthwhile business for a year. Now that was st.
But you got through it-which hopefully means you can again It isn't great and I wish it wasn't like that but it is.
When 9/11 happened we had no worthwhile business for a year. Now that was s
t. 
Im unique as I lend money so have a loan book that is out there. It means as long as the collection ratio is kept high then I am fine. I have had a few customers lose their jobs so I am accepting lower payments than normal.
Working from home my overheads are very low so it really is a numbers game.
I am about to start a marketing campaign to add customers coming up to Xmas. Adding to my customer base is pretty important as I have some larger (and profitable) loans finishing shortly.
I am planning on taking on a couple of people to expand the broker side. I have to be sure that side is viable as taking on rent, infrastructure and staff for the first time and looking at the costs compared to working at home is scary.
Working from home my overheads are very low so it really is a numbers game.
I am about to start a marketing campaign to add customers coming up to Xmas. Adding to my customer base is pretty important as I have some larger (and profitable) loans finishing shortly.
I am planning on taking on a couple of people to expand the broker side. I have to be sure that side is viable as taking on rent, infrastructure and staff for the first time and looking at the costs compared to working at home is scary.
Brown and Boris said:
I think we could survive 2 years or so with no income and perhaps 4 years or if we have a 50% downturn.
I think you have not much to worry about - recessions don't normallylast more than a year or so.
I think it's a racing certainty there will be an election in a year
or two anyway to help lift the mood of the country.
When the BBC start banging on again about man made global warming
might be a suitable point at which to say the recession is over.
If they've got time to make programs worrying us about the state of
the planet, then UK plc can't be doing too bad.
we are relativly insulated - letting agents, although big houses are dead. Most of our properties are small, 6 -12 mths contracts and have a couple of offices in different economic areas one is slow and one is doing well. Even so we have cut of paper advertising to £0 (we do this at xmas anyway) but for a 3 mths period just in case and to see what effect it has on us.
Agents that mainly do Big houses are going to suffer as the tenants are not out there anymore. Bet you will see some big names cutting soon.
A large % of our work comes from the internet so hopefully we can save a load of money. The local Estate agents are down to every other week paper advertising some less.
Agents that mainly do Big houses are going to suffer as the tenants are not out there anymore. Bet you will see some big names cutting soon.
A large % of our work comes from the internet so hopefully we can save a load of money. The local Estate agents are down to every other week paper advertising some less.
dcb said:
Brown and Boris said:
I think we could survive 2 years or so with no income and perhaps 4 years or if we have a 50% downturn.
I think you have not much to worry about - recessions don't normallylast more than a year or so.
I think it's a racing certainty there will be an election in a year
or two anyway to help lift the mood of the country.
When the BBC start banging on again about man made global warming
might be a suitable point at which to say the recession is over.
If they've got time to make programs worrying us about the state of
the planet, then UK plc can't be doing too bad.
This is gonna be big.
The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Edited by dilbert on Friday 14th November 14:28
dilbert said:
This is gonna be big.
The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Did anybody understand any of that????The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Edited by dilbert on Friday 14th November 14:28
mondeoman said:
dilbert said:
This is gonna be big.
The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Did anybody understand any of that????The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Edited by dilbert on Friday 14th November 14:28
Plotloss said:
mondeoman said:
dilbert said:
This is gonna be big.
The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Did anybody understand any of that????The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Edited by dilbert on Friday 14th November 14:28
Nope. Money is at the bottom of my priority list, and non-consumer technology at the top. In fact pretty much the only consumer technology that I have any interest in is business computing, and automotive, but that's a technical interest and not business dependency.
Edited by dilbert on Friday 14th November 16:18
mondeoman said:
dilbert said:
This is gonna be big.
The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Did anybody understand any of that????The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Edited by dilbert on Friday 14th November 14:28
Dave_ST220 said:
mondeoman said:
dilbert said:
This is gonna be big.
The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Did anybody understand any of that????The gods are stirring.
My career, always seemed to be in perfect opposition to the mainstream. It's been lousy for eight years, and day by day the signs are getting better. Somehow and from somewhere employment agencies are approaching me with jobs, that are good matches.
That hasn't happened for a long, long, time.
ETA;
On consideration I feel I should qualify what I've said;
It's not like the permafrost of the last five years is melting yet. More like it's a sunny day, and there's a spindly rock plant sticking up through the snow. From a crimson petal a water droplet has formed, and is about to fall into the vast expanse of snow that surrounds it.
Edited by dilbert on Friday 14th November 14:28
What comes around goes around.
The gods ARE stirring from their slumber.
Edited by dilbert on Friday 14th November 16:23
I don't know what it meant, but I thought it was well written.
I was formerly self-employed and suffered during 1989-1992, now I'm in paid employment but watching as the redundancies happen around me. My feeling is that this downturn will be longer and deeper for many UK businesses. Good luck.
I was formerly self-employed and suffered during 1989-1992, now I'm in paid employment but watching as the redundancies happen around me. My feeling is that this downturn will be longer and deeper for many UK businesses. Good luck.
Trimming expenses to the absolute bare minimum is a definite must these days, Fortunately the best thing I ever did was take the plunge buy the freehold of my business premises way back in 1987 for relative peanuts with a five year mortgage.......would hate to be paying rent now......dead money.
I think we are in for a rough ride for a year or so, then things will start looking up, hopefully when a tory government get in........
I think we are in for a rough ride for a year or so, then things will start looking up, hopefully when a tory government get in........
Yep - for the first time in years we're finding the market much tougher at the moment. Funding for deals is proving tricky and securing new business is getting much harder, as business confidence takes a knock. We do have a few international 'irons in the fire', but this will take time to turn into cash. I predict at least another 18 months of belt tightening and prudency.
dcb said:
I think you have not much to worry about - recessions don't normally
last more than a year or so.
dcb said:
I think it's a racing certainty there will be an election in a year
or two anyway to help lift the mood of the country.
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