We live in ‘interesting times’ as the Chinese proverb goes. That same proverb considers ‘uninteresting times’ as the desired state to be living in and they have a point. Gross uncertainty is not the friend of home or business life and it’s certainly not the friend of calm nerves.
It is currently very difficult to get a firm handle on what really is going on, within the wider economy, society as a whole and across the political spectrum. There is a well-known 14th Century Christian-mystical text called the ‘Cloud of Unknowing’ which describes the experience of dealing with that which is beyond our comprehension. It’s an excellent read for anyone currently trying to make accurate forecasts of where we will all be in the immediate or longer term future.
Over the last couple of years, it feels like a virtual ‘Cloud of Unknowing’ has increasingly enveloped the UK and other parts of the Globe. Economic signals are mixed, political voting intentions have drifted to the far left and right, fault lines have developed across social cohesion, international relations and the domestic business sector. The Government has also painted itself into a corner with some ‘interesting’ decisions of its own making. If you are running a business, personally trying to plan for the future or just struggling to make a decision over what sort of mortgage you want to take out, the current uncertainty is not going to help you sleep well at night.
If you cannot change a situation yourself then you have to look at other alternatives. I’m sure there are many of us who would like to reach out and give political leaders in this country and abroad a good hard slap and ask them to look at themselves. We can dream about it but in reality, worrying yourself to death over climate-change, Brexit or the situation in Korea is not going to result in a change on the ground.
So, what can you do? Prepare for all eventualities as far as you can within your own realm. In terms of business and personal life, here a few starting points to consider:
- Try to broaden your current client base and the type of industries your clients come from. If recession hits, it often doesn’t affect all business sectors equally. Hedge your risks. I suppose this is the equivalent of saying ‘don’t put all your eggs in one basket’.
- Get your terms and conditions sorted out and your contacts who can help you if required. If the economy falters, you need to know that you can enforce your terms and maintain your cash flow. Similarly, make sure you are using quality ‘advice’ whether it be legal, financial or business orientated. If it gets tested it needs to be robust.
- Analyse your ability to survive a downturn. Where is the cut off point for viable income levels? Can you start a ‘reserve fund’ whilst you currently have an excess of income?
- Drive down debt. If you’ve got debt on sources which will be easily affected by an interest rate rise, such a credit cards, turn that into a fixed rate loan or just pay it off if you can.
- Look at forming mutually beneficial relationships/co-operatives with other SMEs or Sole Traders. If you can find ways to cut your expenditure in terms of sharing supplier costs for materials you all need, it’s a great start. Larger orders get bigger discounts.
- For many of us, work and home life are increasingly merging, whether we like it or not. If you are self-employed the costs of your day to day life are a major factor on your business anyway. Have a look at where your money is going? Can you lose one of your holidays a year? Is there a cheaper alternative gym or supermarket. You may not want to switch now but if you have to, you will have already done your homework.
- This is a bit of a weird one. Don’t embroil yourself in bad news. There is little good news to be had currently, well, not through the news networks anyway. Check the headlines, check the business news and then turn it off. You can feel like you are drowning in a pool of misery otherwise. It won’t help you focus on your work or family. It will leave you depressed and feeling helpless.
- Look after your mental and physical health. Get yourself down the gym, start finding some ‘headspace’ and time for yourself. We all have our own ways to do this. Find your own space and get yourself into a good place and robust enough to take anything that comes your way.
No doubt there are many other tips that people have to ‘future proof’ yourself as far as you possibly can. These are just a few ideas to get you thinking. It’s very easy to feel unsettled and miserable at the current time because there are a lot of major changes going on, many of which have very uncertain outcomes. Do what you can personally to look after yourself and your business. If you want to change something on the national or global stage, well, there are many, many organisations doing just that who would welcome your help. Get involved. It helps overcome that feeling of futility that the 21st Century often leaves us with.
Chris Hunter – rhw Solicitors LLP