Plan B

Millions of people who didn’t know it before now know the importance of Plan B. Of course, even if they had had one, the chances of it coping with societal lockdown would have been remote. We don’t – or, rather, didn’t – expect pandemics. We do now. The planet is overpopulated and the consequences of that are profound. Our future is going to be one of disruption by one means or another for a very long time. Can we prepare for that?

In about 1973 the company for which I was working bought a small apple cider plant in Evansville, Indiana. The three owners, all in their early sixties, shared a juicy purchase price. One bought a yacht, one bought a gigantic health and life insurance policy. The third built himself a nuclear shelter under his property. He stocked it with everything you could want in case The Bomb dropped within a devastating range.

The implied optimism that anyone would want to drop The Bomb near Evansville, Indiana was missed by most of his neighbours. But from the moment his very comfortable shelter was stocked, the charming, thoughtful, cautious man who had built it spent all his time reading the sell-by dates of the comestibles and replacing any he judged too risky to keep in light of the expected raid. His Plan B was a little too ‘B’.

Many businesses, on the other hand, have been lulled into a sense of security that was totally unjustified prior to coronavirus. They were not to know the scale or violence of the disease so it was not possible for them to be prepared in terms of supply chains or factory and warehouse capacity. But they should have been more financially prepared. Many were caught without the available cash resources to sustain them over one month let alone one year. Speculation had led to risk taking unjustified by the evidence of success and failure.

Some Governments have spectacularly failed to face and deal with the problem of lives versus livings. Little was known about the behaviour of the virus so they can be somewhat forgiven for that. What was known was the importance of forecasting in planning and speed in reacting to more information about the disease. Many did the former with scant regard to the poorer members of society. Others thought a cavalier approach would frighten the virus away. Both were irresponsible.

In simple, family terms, every home should today have quickly available on call, nine months living costs, plus another six months cash on standby at modest interest rates. That is a basic domestic Plan B. The timescale for businesses varies depending on the cash flow of the business. Small businesses in the USA are now said to have two weeks cash flow support once the government handouts cease – very shortly. One thing is certain. In the emergency of a pandemic or similar disruption the time customers take to pay will extend dramatically. And bankrupting them gives neither practical relief nor emotional satisfaction.

Supply chains are particularly vulnerable to disruption in a world shaking with the tariff threats of the USA and China. The process of deglobalisation, undesirable as it is, is somewhat inevitable in the trade war posture of these big giants. In this situation access to supplies from other than established sources is the minimum Plan B you can provide. Your regular suppliers will be helpful over this if you have kept them as friends and negotiating enemies. Never was there a more important time for friendly suppliers.

Plan B is not only for finance. The internet has enabled us to be in touch even when we cannot literally touch. How well equipped the young and old are to handle the media by which we can communicate determines how much pre-disaster training there should be. More than has happened in the last five years, anyway. Facility and safety are the centres of competence of the internet. Everyone should have a course at least once a year lasting at least six hours to update them on the internet and its proper and safe handling. I’d make it a condition of use.

Thinking through what the other consequences of difficult situations are is not something people are taught even today. They should be.

There’s an old saying that those who do not have a Plan B will find themselves in someone else’s.

That or they will be preparing Plan C.