To be worried at the amount of companies in financial difficulty already

[Handiies]

Oasis and Flybe isn't a huge surprise. But now we have virgin and even Mumsnet saying their future is very uncertain without a bailout.

I can't see this ending anytime soon and worry the knock on affects will be huge. What happens when furlaugh ends and if lots of companies just can't continue trading? Lots of places were having a hard time anyway and this could be the end of them. Then what Amazon, Google and apple to be the only companies with money and will hoover everything up? It seems so worrying that we'll soon have little choice but to buy from tax avoiding companies that weld so much power

I’m interested in the government backed business loans and how many will default though.

Presumably businesses that rely on face to face trade will struggle, but they'll either evolve or be replaced by businesses that can exploit the new socially distant culture e.g. takeaways and food deliveries rather than restaurants. That's the nature of capitalism isn't it? If there is a demand, someone will move in to supply it.

It was always inevitable that thousands of businesses would fail as a result of lockdown. Small businesses simply don't have the cash reserves to weather a sustained period of zero revenue. Many large businesses have very high fixed costs and operate on very tight margins so they too are at risk. The first to go would obviously be those that were already struggling but many otherwise healthy medium and large businesses will not be able to survive a sustained period of zero or highly reduced revenue. You also have the domino effect to consider where businesses that fail will also take out those suppliers that were too dependent on them as a customer.

The economic ramifications are truly terrifying. Our economy, indeed the world economy, will not recover from this any time soon and there will be a lot of casualties.

’m interested in the government backed business loans and how many will default though.

I think lots are having issues getting the cash though

Mumsnet is the only forum that I've heard of with a £350k per year wage bill. All of the other forums of this size that I use are run with no external funding...
That's per month not year

If you have fixed overheads and a wage bill it’s easy to see that zero cash coming in is going to be a huge issue for many companies.

I don’t think furlough can be extended again but I wonder what will happen after it ends and demand is still low.

@Squashpocket I agree

That's per month not year
Jesus - How on earth do they get away with that....
I'm a moderator on several forums with hundreds of thousands of users each, they're all completely self-funding without adverts.

Yes it makes me terrified and sad in equal measure. Even if we open back everything tomorrow people will be more cautious, both with their physical going places and their own finances. In addition we have to remember the private and government loans will put an extra pressure on companies to raise prices- it’s crap all round!

Jesus - How on earth do they get away with that....
I'm a moderator on several forums with hundreds of thousands of users each, they're all completely self-funding without adverts.
MN has a turn over of 8 million a year, or at least used to, and has 100 employees.

How many employees do other forums have?

Yanbu. The lockdown will cause more deaths through poverty, suicide and missed cancer/serious illness diseases than if we had stayed open as usual and covid spread more.

Most of the pubs round here are selling beer, wine & spirits & mixer packs to either click & collect or deliver, plus some are doing takeaway meals & nibbles, things like nuts, olives & bread, posh crisps. Half the population will be alcoholics by the time lockdown ends, every night is friday night.

Well lots of small / medium size businesses will just go bust and start up again after dumping their debt (and that could include Mumsnet). There will be winners and losers but that's business in a recession which is bound to happen.
It all depends on how long the lockdown lasts - the sooner it stops the better for businesses and people's jobs

Some businesses will bounce back quickly because the demand hasn't gone away, it is just pent up. Take lawnmowers for example. People may not have bought them in March or April, but the demand is still there and if everything opens up again they will sell three months worth in May.
Likewise car MOTs - the demand is accruing.

In some instances the demand will not be pent up and will simply have vanished. Take taxis, or haircuts, or massages, or manicures. People will still get their hair cut in May of course, but the March and April cuts are gone forever.

mumsnet has 100 employees with 8 million turnover, gosh after wages, pensions etc. where does the rest of the money go. To bank interest perhaps. That is the problem, bank loans, who are happy to loan you money then when things get tough or your business model just does not work any more they have to get what they can back. Rents and rates commercially are eye wateringly expensive these days as well.

Mumsnet has 8 million turnover? And we are providing the content for free?!

Where does the money come from?Just advertising?

Sorry, this is going to be a bit rambling - it's Friday night and wine has been drunk. Re Mumsnet - to me, as a fairly casual user, it is a real enigma. I really only ever come on AIBU for a bit of light entertainment (aka seeing what batshit opinions/cfu are being talked about). I know it has lot of other pages which I assume is where the money is spent in articles etc but does anyone really use them? Isn't it all about the forums? 100 employees seems a hell of a lot?
AND for all I know it has loads of users, I can't get over how clunky the usability and so on is. It has a far bigger footfall, and higher profile, than other forums I use but is far less user friendly. No automatic bookmarking of where you've read, no quote facility, no ability to like posts - I could go on. It just all seems a bit amateurish in tech terms than much lower profile sites. Not a good marketing model as far as I'm concerned. And I get the impression that they could have sorted this far earlier but couldn't be arsed. Their premium brand doesn't seem to be offering much for a ridiculous amount of money. So I don't feel particularly inclined to give them money now when they didn't try to improve things before (when as I say other smaller forums have offered far superior features) Probably going to be banned now for saying this but what the hell.

Ali you're asking many of the questions I am. It doesn't seem to add up at all. I assumed MN was just one person at home with some moderators. Was surprised to know they have an actual office and 100 people. I think they need to be more open now they're wanting users to bail them out of their loan. I have no doubt Justine is a savvy businesswoman, but I'm quite confused by it all.

For small businesses (online or physical) to prosper post-lockdown, we all have to use them and not just turn to Amazon automatically.

I think prices will rise a lot. They're already creeping up in supermarkets so people will be more careful with what they spend. Things people may have seen as essential such as eating out may be seen as more of a luxury once all this is over, thus adding to a downward spiral.
It's not going to be pretty, that's for sure.

But if prices rise how will people afford them?

Wages won't be rising but taxes will to pay back.

Mumsnet don't want us to subscribe to bail them out of a loan, they have launched a subscription service because they need income from somewhere to pay the overheads. Presumably their cash flow was fine until their ad revenue declined suddenly to almost nothing. I bet there are other business expenses they can't pay too - I'm sure I saw mention of staff reducing their hours too.

I'm sure the subscription service was in train already as they were able to launch it so quickly. It's a natural step to boost your revenue - they are, after all, in business to make a profit! It might be their saving grace, as they weren't previously relying on subscription income so it's a genuine new income stream.

How is it almost nothing? I still see alot of ads.

The Mumsnet subscriptions are to help pay back the loan, Justine has said it pretty much.

There are no premium features, thats how they were able to launch it so quickly because the only difference is fewer adverts.

In some instances the demand will not be pent up and will simply have vanished. Take taxis, or haircuts, or massages, or manicures. People will still get their hair cut in May of course, but the March and April cuts are gone forever.

Indeed. On top of that, overall consumer demand is in large part driven by the collective spending power and confidence of consumers. How many have seen their income significantly reduced since lockdown started? How many no longer have jobs? They won't be rushing out to spend because they just don't have the money.

I also think this will have been a wake up call for an awful lot of people. Millions must have realised how financially vulnerable they are, even if they were lucky enough to maintain their income. I think a significant number of people will be more financially conservative going forward than they were pre-lockdown.

My completely amateur guess is that we will see a very brief retail boom when restrictions are lifted as people go out and enjoy the freedom. Medium and longer term though I think it will be a very long time before retail sales recover to their pre-lockdown levels. Lack of consumer confidence, significant increase in unemployment and a downward pressure on wages generally will all play their part. This will not be just in the UK either but worldwide so all sectors of business, not just domestic retail, will be impacted.

I maybe being dense but how is Mumsnet in trouble if it's online based and doesn't rely on people buying in a shop like retail?
How has corona affected mumsnet and has mumsnet said they are in trouble?

Really agree too good, it's going to be a very short term increase when things open. Long term I can't see any return to normal for years