Robust Choices

During 2020, the Covid-19 virus has slowly but steadily eroded a mark into every facet of life. Wake up and watch TV, the presenters are sitting 2m apart from each other. Go to work, now means just walking from your bedroom to your spare room. Informal team meetings that used to be held in the foye are now typed out over messenger. Picking up dinner from the shops used to attract police attention if you wore a hood and bandanna around your face, now, its Wednesday.

There is nothing that hasn’t been affected by this pandemic, and as it progresses, things seem to only be getting worse. Sure we had a brief lull in the infection numbers, but now they are climbing again and the country is already on its knees. The first rapid spread of the infection brought the Government to issue a nationwide lockdown, halting pretty much everything. This was only possible becasue they were willing to pay people to stay at home through the furlough scheme. This meant people technically kept their jobs, kept getting paid, so they could keep paying bills and keep financially afloat. 

But that cant go on forever, so will be removed in October 2020. In October, businesses will have to start to pay a part of the furlough money themselves to keep people at home. This is only possible becasue when the infection rate dropped, trade and businesses were allowed to open up again, albeit with some serious curtailment. Limited interaction, limited numbers, limited opening times, limited group sizes. 

This all has an effect on how a business can operate. For example on an average day, a clothing store is expecting 300 people per day to come into its store. Now because of these restrictions, significantly less people are coming in. Let us assume people’s appetite for shopping has not dropped and that before and after the restrictions were implemented, 50% of those shoppers actually bought something. With less footfall due to the limitations and more people buying online to avoid the limitations, the business will be making less money. Add to that, the requirement to quarantine ALL items a potential customer touches, but does not buy… And suddenly, to maintain the shop, you have to buy increased stock levels. Lastly from October, paying to keep some of your members of staff at home on furlough, while cheaper than paying them full wage to stand around doing nothing, it still costs and the business gives zero benefit. 

Its a financial and economic recipe for disaster.

The Gov, has offered financial aid to companies that need it, but these are loans, and have to be paid back. If businesses are using the loan to pay shop rent and bills, because their revenue stream has dried up, then when this all finally does blow over (which it has to at some point, or everyone will go under) they are expected to pay those loans back. Those repayments will have to come from the revenue the business makes, so even assuming the world returns to exactly the way it was before the crisis appeared, businesses profit margins will be reduced. Businesses are not in operation for fun, they are there to make money and if they don’t, they will close down. The only way to prevent this will be a cost saving exercise that every private business will undertake, nationwide.

Unfortunately as much as people do not want to hear it, the labour force in businesses makes up one of the largest costs. As a business, you can either do more with the same or do the same with less and this is what will happen. I predict that the least productive members of staff that were not dramatically missed during the height of the pandemic will be made redundant. Additionally, forward thinking businesses (the ones that will survive) will implement technology to streamline a lot of processes and remove the requirement for people from the process where they can. There will be huge redundancies across (nearly) all sectors of the economy. Some of them have already been announced. If people are made redundant and every company is doing the same, there will be no new jobs available for the people made redundant to get a new job to start working again. This means the Government will have a massive income support bill coming its way if it wants to stop millions of people becoming financially unstable. 

I said “nearly” every sector of the economy will be impacted, so lets think about what will thrive in this brand new business environment. Anything delivered or in the delivery chain, for a start. 

Amazon is exploding right now and will do fantastically from this, recruiting drivers, warehouse operators, IT professionals. Do you want to know how they run such a successful business? They have an incredible feedback loop for delivery driver performance, related to the quantity of work they receive. Do some google-ing and see what I’m on about, its genius from a business perspective. 

Takeaway food operators and the technology that binds them will all get a boost. If you can’t go out for date night at a fancy restaurant, why not have it delivered to your home. You didn’t really like getting all dressed up anyway.

Medical research, supplies, distribution and manufacturing – for obvious reasons will have money poured into it for anything related to health.

I’m sure there are others, but this is just a snapshot to give food for thought.

I chronicle all of this and give my predictions because it will be interesting to see how much of it comes true. But also to share a perspective I hold, that, at least for the time being, has provided me a lot of stability compared to others during this crisis. 

Make robust choices that are driven by base human needs, not fancy wants and fantastical desires. By this I mean that whatever you pursue as a form of income generation, should be as closely related to basic requirements of all humans on the planet. If you do this, you will always be in demand. The basic requirements are easy to identify – food, water, shelter, warmth, medicine. Things that cannot be done without.

I’ve held this viewpoint for a long time and can remember being in school thinking about A-Levels and Degree’s and Jobs and thinking, “I quite like buildings and designing stuff, so maybe I should be an Architect?”. Well that’s great, but what base human need is it closely related to? Housing? Yes, but if a crisis occurred, would we be paying expensive architects to design amazing and unique houses or apartment blocks, or would we just copy and paste the existing tried and proven ones? While they may be ugly, the spread of concrete tower blocks and cookie cutter houses across the country in the 60’s solved a housing crisis in a short period of time. I didn’t fully form this thought and reasoning when I was 15, but I knew that to put up a tower block you would need an Engineer to put some maths and physics behind the pretty drawings. An Engineer is also used in more than just buildings, they have application in EVERYTHING that exists that has been built or made – a very robust field of study. Once this decision was made, I briefly toyed with the idea of becoming a motorcycle engineer, but for the same reasons, I chose a more broad engineering degree. 

It was a good decision too because when I left with my degree, I didn’t get the ideal job I wanted with Triumph Motorcycles, but I got a very good job with a Crane company that I thoroughly enjoyed and prospered within. I don’t think I would have gotten that job if my degree said “Motorcycle Engineer” instead of “Mechanical Engineer” so I was glad of my robust choice.

As this pandemic continues, people will need to move and change what they are doing to cope with the new work environment that is evolving. If you are going to prosper, or at least, not drown in the flood, I hope you give some serious thought to my advice to make robust choices with what you do. 

Oh, I’d also add, always have a backup plan. Think about a way out of any situation you might find yourself in. Or as someone once said to me “Heads I Win, Tails I Don’t Lose”.

Today we went to Fort William shopping. Aimi’s boots are still soaking wet and she doesn’t want to go up Ben Nevis with them so she’s buying a new pair. That will not be broken in at all by tomorrow. Its a terrible idea, but to be fair, her current pair are leaking and the soul is coming away from the upper.

While Aimi went shopping, I did a lot of work in the only pub that allows dogs. Then we came home and I wrote this economic meltdown rant.

Good day