How did your business survive last time?

[Frimley111R]

Obviously we've seen lots of posts from people (myself included) wondering if this is the end for their businesses but many seem have been in operation for decades. How did they survive 2008 for example or the recessions before that?

From my experience, in 2008 the company I worked for just threw a lot more money into marketing and we had a downturn of about 1 month. A friend ran a recruitment business which saw calls almost literally stop overnight but he kept it ticking over with far fewer staff and then built it back up 40 staff.

How much worse/different is this situation?

[schmalex]

This situation, for many businesses, will make 2008 look like a tea party. Commerce will not get to anywhere near normal in 2020. That’s the simple reality. Many businesses will be struggling to fill their sales pipelines such that, even if they can survive the short term with current WIP, they will be screwed once they’ve delivered current projects.

[Haibiker]

I worked in corporate bond trading between 2008 and 2012. It was a great time to make money and we took lots from the bailouts. This is different. The public were 99% unaffected I seem to remember. 2020 affects everybody. I now sell ebikes. Been great since we started in 2014. Even if I could open the shop, I wouldn't. Even if a customer came in he couldn't / wouldn't buy anything. Even if some maniac decided to spend 5k on an eMTB we can't get bikes delivered. Even if we wanted to forward order bikes PON and Accell have stood staff down. It's slowly sinking in...this is a fundamental rethink ...

[classicaholic]

I am in Engineering making machines, In 2008 we cut the hours down to 20 hrs a week but kept everyone on, it cost me a lot of cash from company reserves and my own pocket but we survived and built up quite a bit of stock of spares and machines we knew would sell, we built the steel parts of the machines but didn't add the expensive bits like motors and electronics but theses could be just bolted on when we got orders.

It was tough but we recovered very well and I got all my money back plus a lot more!

The moral is that you have to be still in the game to be able to win!

[DSLiverpool]

In 2008 I was selling phones and headsets, I wish I was now as all my old contacts in that game are flat out with home workers!

Now it’s e-commerce marketing and we have annual £500k overheads to cover, we’re hoping to market our way through it by targeting business in the “could be busy right now” sector. There are definitely opportunities around the home based and bored demo, 90% of us?

Unparalleled times when everything you thought was important in January has been flushed down the loo in March.

[So]

We did really well 2008-2012 buying up cheap, big, resi properties and using permitted development rights to convert them into flats. Lots of cheap property, lots of cheap money (still).

The wheels fell off around 2012 when two successive commercial lenders pulled out and tried to screw us. Unsuccessfully, I am pleased to say.

We should be able to weather this current storm, providing everyone does the right thing, and I am trying to find angles to ensure that we come out of it ahead. In better shape than before, if I can possibly manage it.

In my experience, when things like this go wrong, you need not to panic. Don't look for immediate solutions - let your subconscious work through the problem. Be tough. Preserve cash; you aren't helping anyone by not doing so and then going bust.

[Gecko1978]

I worked in the regulatory side of banking and had done for years demand for my skills went up. Sad thing is what I saw then is most did not understand the rules or what the purpose was. 12 years on way more people got into reg but same issue as before people do not understand underlying purpose of the rules so bend them flout them to fit with there managing up agenda. Its why in 2008 banks had issues an why in 2020 the government has turned on the lending taps but it makes a mockery of all the enhanced regulation if in a time of stress firms actually cant cope.

[Nick928]

I owned exactly the same business in 08 although service and business model has changed over time.
Made the mistake of feeling obligated to keep the staff on and fully paid until the point it nearly took the lot under.
Ended up with me and one other and took the best part of eighteen months to dig my way out of the financial hole.

Won’t make that mistake a second time.

It is a wildly different scenario in cause, speed of drop off and the likely bounce back.

[Greenie]

Think you survive in difficult times not by what you do when difficult times arrive but how you run your business before they arrive. At the expense of growth at times.

So retain profits, build good teams and contingencies. So when the tide goes out....

Currently we are continuing to run almost full sales and marketing activities to build pipeline momentum for when things normalise.

Hopefully the competition will only be looking to survive so we will be ahead of the game. That’s the plan anyway-time will tell

[KellyClark]

I reduced costs and got some quick cost-cutting ideas about change management here https://softteco.com/blog/the-process-of-managing-.... Change management in IT is the process of obtaining a request for a change in the software product, approving and implementing it. There are dozens of factors that impact the development of a software product and all that needs to be processed and included in the development process.

Edited by KellyClark on Wednesday 13th May 09:47

[Simpo Two]

In 2008 I was a photographer, mainly weddings. It was my busiest year, in fact so busy I put my prices up to thin it out a bit. No staff, no overheads - everything that came in, minus petrol, was profit.

[mondeoman]

We didn't

[vaud]

It's a very different recession.

Recovery will vary by sector and country. U, V, L, W etc shaped recoveries are all possible per sector but it is not going to be pretty (understatement).

[Simpo Two]

I don't think of it as a recession, ie failure within the economy, more a pre-meditated depression in response to external forces. The economy was in very good shape before the external force arrived. That force will go away. If we're back to normal next year spending could hit new highs as people make up for lost time. People will have two holidays instead of one. New businesses will spring up to fill the holes left by the ones that didn't make it. It's really if you want to see the light at the end of the tunnel or a train coming towards you.

NB I reserve the right to be completely wrong

[Simpo Two]

I don't think of it as a recession, ie failure within the economy, more a pre-meditated depression in response to external forces. The economy was in very good shape before the external force arrived. That force will go away. If we're back to normal next year spending could hit new highs as people make up for lost time. People will have two holidays instead of one. New businesses will spring up to fill the holes left by the ones that didn't make it. It's really if you want to see the light at the end of the tunnel or a train coming towards you.

NB I reserve the right to be completely wrong

[vaud]

Simpo Two said:

I don't think of it as a recession, ie failure within the economy, more a pre-meditated depression in response to external forces. The economy was in very good shape before the external force arrived. That force will go away. If we're back to normal next year spending could hit new highs as people make up for lost time. New businesses will spring up to fill the holes left by the ones that didn't make it. It's really if you want to see the light at the end of the tunnel or the train coming towards you.

NB I reserve the right to be completely wrong

Supply side will be fine for some sectors.

The issue for most will be demand side. Not a shortage of money, but a lack of propensity to spend given uncertainty... or just not needed.

Who needs a rail season ticket if you are WFH 3 days a week? Subsequent impact to food retail, taxis, etc

[PT88]

vaud said:

Supply side will be fine for some sectors.

The issue for most will be demand side. Not a shortage of money, but a lack of propensity to spend given uncertainty... or just not needed.

Who needs a rail season ticket if you are WFH 3 days a week? Subsequent impact to food retail, taxis, etc

Exaclty this. Life is not going back to normal for a long time. The question is will the money spent on taxi's, food retail etc... as per your analogy be spent elsewhere, or will it be taken out of the economy (put in savings or taken by employers to maintain survival). It is not about the amount of money in the system it is about the speed it travels around the system!

[Cheib]

PT88 said:

vaud said:

Supply side will be fine for some sectors.

The issue for most will be demand side. Not a shortage of money, but a lack of propensity to spend given uncertainty... or just not needed.

Who needs a rail season ticket if you are WFH 3 days a week? Subsequent impact to food retail, taxis, etc

Exaclty this. Life is not going back to normal for a long time. The question is will the money spent on taxi's, food retail etc... as per your analogy be spent elsewhere, or will it be taken out of the economy (put in savings or taken by employers to maintain survival). It is not about the amount of money in the system it is about the speed it travels around the system!

An obvious extension to this theme will be a chance in how business is done.....I’d done one video conference in twenty years until six weeks ago. Business travel is going to changemassively....not only because of the issues with flying but because it’s expensive, an inefficient use of time and generally for the poor sod doing it bloody tiring. Sure some travel will still happen but I think it will be a fraction of what it was and I honestly don’t think it ever goes back to what it was.

[So]

Simpo Two said:

I don't think of it as a recession, ie failure within the economy, more a pre-meditated depression in response to external forces. The economy was in very good shape before the external force arrived. That force will go away. If we're back to normal next year spending could hit new highs as people make up for lost time. People will have two holidays instead of one. New businesses will spring up to fill the holes left by the ones that didn't make it. It's really if you want to see the light at the end of the tunnel or a train coming towards you.

NB I reserve the right to be completely wrong

An interesting take. I think the problem may be the unemployment numbers.

But what I CAN see happening, a bit like you, is that when the pubs and restaurants reopen those people with money may just kick back for the remainder of the year. Holiday a bit, have a good time.

[vaud]

Cheib said:

An obvious extension to this theme will be a chance in how business is done.....I’d done one video conference in twenty years until six weeks ago. Business travel is going to changemassively....not only because of the issues with flying but because it’s expensive, an inefficient use of time and generally for the poor sod doing it bloody tiring. Sure some travel will still happen but I think it will be a fraction of what it was and I honestly don’t think it ever goes back to what it was.

Short term international will be terrible. By example if you are an American flying into France then you have to quarantine for 2 weeks on arrival. So two weeks before you can have any face to face business meetings. Domestic and European will pick up sooner.