Robinson Jackson MD: "Boarded-up shops and offices surely can't be allowed to happen"
In an exclusive article for The Parliamentary Review, Robinson Jackson MD Alan Robinson discusses the issues he sees with the nationwide lockdown imposed on the UK. Survival, Alan says, is all a matter of timing.
Make no doubt about it -- the biggest challenge for businesses is not knowing whether or not the government truly understands the commercial and economic predicament from a company point of view, especially with regards to the high street. And this challenge isn't something we'll face tomorrow, next week, next month -- it's right now.
Whether it's Costa branches or local barber shops, surely we can't allow shops and offices to be boarded up. Can that really be allowed to happen.
The economic equation is simple: nil income + bank balances + savings + CBILS - essential cost-cutting = survival. For each and every business, whether or not this equation works is a crucial question.
For the Robinson Jackson group -- we've been in business for 27 years with 25 successful estate agency branches and 250 staff -- this is what it means to us, point by point:
- Nil income means no new sales or completions from our considerable (but currently hibernating) pipeline -- for the foreseeable future.
- Bank balances will be what we have accrued from an excellent first quarter.
- Savings will be monies in partners' personal or family bank accounts. Assets, of course, are of almost no relevance. Properties can't be sold at present to realise additional money.
- CBILS may "save our bacon" and we are submitting right now to that end. How quickly the bank comes back to us will be crucial.
- Essential cost-cutting includes furloughed staff (approximately 200), concessions made by HMRC, reduction in partner salaries (including no income for Peter Jackson or myself after 50 years as business partners) and serious reductions in all other expenses.
- As for survival -- that will entirely depend on when we can get back to opening our 25 branches, have our staff back at their desks and, in the simplest terms possible, start selling homes again.
My business partner Peter Jackson and I have been in business for 50 years. We've pulled through six recessions -- the first in 1973. We've always pulled through and brought our company back to being the number-one estate agent in pretty much every area in which we trade.
But the difference is that in every other recession, we still received some income. In 2007, we turned over £12 million -- and in 2008 that dropped to £6 million. We traded with great enthusiasm and relied on financial support to pull ourselves through.
Today, that figure has dropped to zero. There is no income and none on the horizon as long as we stay under lockdown. The CBILS is the only way forward I can see for our business and for many others -- and it has to be funded and handled efficiently and effectively.
But this isn't just about Robinson Jackson. To get back to normal, we need to start selling homes -- Costa needs to start selling cups of coffee, and local barber shops need to cut hair
For the majority of businesses, the effects of the virus have become more and more worrying as the last month has gone on. A family member, be they old or young, falling ill now governs our thought process.
However the reality of where the money is coming from is starting to close in on the above.
We must all hope that we are playing our part in defeating this disease -- but what people in business need is the reassurance that messages coming from government ministers and decision makers show as clearly as possible that solid businesses will not be allowed to fail.