Having the right attitude in this tough period ahead will help make life easier
ACCORDING to a recent report from the consultancy and big four accounting firm Deloitte, the rate of insolvencies in 2009 rose by 60 per cent on previous years.
I remember 2009 well. I had founded MCE in 2006, and about a third of the company's revenues in those early years were property related. The property crash of 2008/2009 changed all that and revenues from property fell off a cliff. We were also doing some business in Dublin in those days and I had made a job offer to a pretty senior person in that market place.
In the end, the person didn't take the job, which was just as well, as the property recession hit Dublin harder even than Belfast and our work in Dublin died a sudden death too. It was about five or six years before I was back in Dublin for business purposes.
The Deloitte report 'Another Storm on the Horizon' projects insolvencies in the first half of next year at nearly 80 per cent higher than normal with retail, automotive, accommodation and food servicing sectors being the hardest hit. In other words, things are going to be worse than 2009.
But that's not surprising to me. In 2009, despite the recession, MCE actually managed to squeeze some growth, albeit it was small. Unfortunately, and for the first time since the company was founded, 2020 is likely to see our overall revenues go backwards. Not by much, hopefully around 10 per cent depending on our last three months (our year-end is January) but still, it's been very tough and some parts of the business, particularly event management, have dried up completely.
Unfortunately, that has meant redundancies, something I've never had to do before. 2020 won't be forgotten in a hurry, and for many, its end can't come quick enough. Having said that, and despite the gloomy predictions for the first half of next year, I look at our performance and I see that it will broadly reflect the downturn in UK GDP in 2020 of -12 per cent.
I also think about how our people have adopted and responded to the crisis in such brilliant and positive ways and the growth and new business won in some parts of the company which provide real grounds for optimism for 2021. I believe we are in good shape to take on the challenges ahead, though no doubt, it will be tough. And I think the experience of the global financial crisis in 2008/9 will help us all.
Back in late 2005, I went to see a long-standing client to ask his advice on some business matters. At the time, things were a bit uncertain in my old company and I needed a steer. His advice was clear and simple. A few months later, MCE was founded. I'll not mention his name, but that client is probably the most admired and successful person in the property sector here.
Like everybody in the property world, the recession of 2008/9 brought serious challenges to him and his companies. He told me a few years ago that during that period he created (in his mind) a good bank and a bad bank for the various assets he owned or controlled. The poorer assets which didn't offer the prospect of a longer-term return went to the bad bank and the better assets went to the good bank.
That sounds simple, but of course it wasn't and a huge amount of work was required to disentangle his portfolios, shedding the non-performing properties and re-financing the good ones. Ten years on, he and his family are in very, very good shape.
One of the things I like about his story is that from what I understand, see and hear, he acted honourably, respectfully and cheerfully throughout. There were no dirty tricks or temper tantrums, everything was done well and where possible, with a smile. He's always smiling and I don't know anybody who has a bad word to say about him.
When I think about this Christmas and the prospects for 2021, I think about that story and the way, if the right approach is taken, people can get through it and even prosper at the far end. And if business can be done with a smile and even a kind word too, then maybe things will be a little easier for everybody. In my view, bringing the right attitude into the tough period ahead will go a long way to making it easier.
Of course, there will be extra hardship for so many families this Christmas and difficult choices may have to be made in some cases. Given all that's happened this year, the coming holiday period seems more important than ever before, doesn't it?
It's not December yet, but Christmas trees and decorations are going up all over the place. I've just had a wonderful festive weekend hanging lights and baubles. I've never done that in November before but it felt great this year. I've also resolved to post Christmas cards for the first time in many years. It just seems right.
And in business terms for 2021, I'm going to be relentlessly positive and cheerful, in addition to working hard, marketing well and being smart about what to take on and what to let go.
There are some tough times ahead, but there is a way through it and when possible, a smile always helps too. In the meantime, have a very merry Christmas, and if you can, spend some money safely in our local pubs, restaurants and hotels, because they and their staff need the business when they get the chance to open in December.
:: Paul McErlean (firstname.lastname@example.org) is managing director and founder of MCE Public Relations
:: Next week: Claire Aiken