Business Through The Kaleidoscope
It is interesting how businesses develop over the years. In 1973 the U.K. joined the E.U. At last we had a “cushion”, a “comfort blanket”. As in fashion, there are trends. I was lucky enough to start my first business during the Thatcher years, the “You’ve never had it so good” years. Entrepreneurialism was everything. I started on the kitchen table, and within two years had 2,000 square feet of office space, twenty full-time staff and fifty part time staff. We also had anywhere between 3,000 and 6,000 casual part-time people working for us. We had “never had it so good”. Everywhere, entrepreneurial businesses were springing up; big, expansionist ideas put into action, the economy thrived, Brits felt good about themselves, there was a buzz in the air. Exciting times!
All those entrepreneurial businesses were financially supported by the Banks – big loans and big overdrafts in abundance. Those were the days when SMEs and others had to wait six months for invoices to be paid, but nobody minded that much, the banks would help. The attitude was “we have to live with it”.
Then we had Black Monday in 1987. The cause? It started in the U.S. where markets fell by 20% overnight. The cause is debatable but largely believed to be the introduction of computerised trading at too high a level for computers to cope. Simplistic, but probably factual.
It didn’t stop there. The 1980s and 1990s saw the Savings and Loans Crisis in America, the Junk Bond Crash in 1989, the Tequila Crash in Mexico in 1994. In 1997 we saw the collapse of the Thai Baht which engendered the Asia Crash, then the global Dotcom bubble in 1999. The Great Recession triggered by the U.S.A. housing market crash in 1997, and then the European Sovereign Debt Crisis started in 2009 and carried on for ten years. 2015 saw the China Stock Market Crash. There were many other crashes around the globe, mostly affecting individual countries, and now, in 2020 we have Coronavirus, a global pandemic which promises to cause a Greater Recession than anything we have seen to date.
Governments would like to think they run the world but, in my opinion, they do not. The World is run by banks. Banks, with their ability to give or rescind funds, are in charge. In 1987 the U.K. banks called in the debt. All those businesses which had relied on banks were given just days in which to repay thousands. My own bank manager told me “We will always lend you an umbrella when the sun is shining, but we want it back when it starts to rain”. Many, many businesses went to the wall. And so, following Black Monday, entrepreneurs were let go and replaced by Accountants (bean counters as they are sometimes known). The Accountants pulled companies together where they could, balanced the books, and finally, after much soul searching, financial stability became the norm. A price was paid; companies learned to keep their heads down, get on with the job, do what they were good at, and survive. Accountants were in, entrepreneurs were out. Besides, we were members of the EU, we had that comfort blanket to sustain us. We needed to look nowhere else. We were to discover that even comfort blankets have their drawbacks.
Now we are about to leave the E.U. In times of change, strong leadership is essential. We need to look beyond the E.U., we need to be self confident, raising our heads above the parapet, above the fear of change. In order to survive, we have to take risks again. These are exciting times, the world awaits, it is our oyster. Those beanies running companies which have engendered an ethos of caution need to embrace the entrepreneurial spirit; they need to look to the horizons. The Banks need to step up to the plate and get involved. Then, finally, we can be responsible for our own destinies, no more stifling E.U. rules and regulations. We are on our own and, being British, we’ll make a very good show of it.