Connect with us

General

Recession Proof Your Business And Focus On Recovery

strategies

Governments and businesses do all they can to avert a recession and in the USA it’s been a decade since the last recession which is a first. The economy has been expanding for a record 126 months. However, the forthcoming recession, this time around is unavoidable, as it can not be controlled by stimulus and the printing of money.

Global Pandemic

Coronavirus has forced state and national lockdowns, plus the halting of some production and movement of goods, and it is now a global pandemic. Businesses in industries most impacted by travel restrictions and isolation measures will get Government help, including wage subsidies and tax changes in countries like the UK and Australia.

Unlike the usual stimulus mechanisms like the printing of money, economic stimulus is unlikely to halt a global recession, and many jobs will be lost in industries including air travel, tourism, hospitality and retail.

Vulnerable Sectors

In the USA, MarketWatch warns if the pandemic worsens expect to see store closures however while there is stock, online shopping may carry some retailers through the worst of the downturn and keep many operators in business. Plus companies in some industries will be reluctant to cut jobs due to recruitment challenges. The market will rebound, and it will be the organisations that can hit the ground running that will recovery ahead of the pack.

In manufacturing and construction, jobs are now more technical as technology is integral in both industries. Rather than hiring again, existing skilled workers will be retained but offered unpaid leave, shorter weeks, and flexibility to take up work where they can to cover any salary shortfall. In uncertain times, nothing is off the table as management review HR and staffing policies meet the needs of all concerned now and the months ahead.

Recession-proof Sectors

Recessions are good for some sectors and when the economic downturn is caused by a virus there is unprecedented demand for products and services in healthcare services, biotechnology and pharmaceuticals and arguably the manufacturers of tissues, toilet paper, cleansers and hand sanitisers. Panic buying has depleted supplies and created an unprecedented demand for these items.

Countries want to get ahead of coronavirus and demand for healthcare workers exceeds supply, so in some countries, the call has gone out for able doctors to come out of retirement. Plus in times of stress and anxiety, loss of work and income, crime rates rise, and security services receive a boost in demand to protect property, stores, and people. Security alarms, cameras, monitoring and the like are also popular.

For all other sectors, that are not on the frontline of battling CO-VID19 and its unintended effects, the need to recession-proof and get through the downturn in demand is paramount to survival.

Recessions

Recessions are not new, and it’s the companies that plan for the best but prepare for the worst that survive during tough trading times. In this article, we look at what stimulus Governments are pledging and what you as a business owner can do, i.e. what’s within your control to a recession-proof business.

Government Stimulus

UK Prime Minister Boris Johnson will sure up the economy with a massive £30billion stimulus package. Statutory sick pay for all workers who are told to self-isolate and businesses with less than 250 employees with get the sick pay refunded within 14 days.

USA stimulus package will be north of $100billion and will include paid sick leave, an infrastructure plan and a payroll tax break all up for a bipartisan agreement between the Dems and Republicans.

Scott Morrison, the Australian PM has announced an AUS$17.6billion stimulus package with three goals in mind for Australia, and it’s inhabitants.

  • Protect the health and wellbeing of Australians
  • Look after jobs and incomes
  • Put the economy back on track to achieve growth targets

Recession-proof Tips

If history is anything to go by, a recession lasts on average 11 months and during the downturn businesses typically need to respond to a drop in revenue, and tightening cash flow. Acting before the recession, to get ahead of it improves the likelihood of survival.

Reduce Debt

Deleverage to reduce debt levels before the downturn is key as is reducing non-essential costs. Cash is king in recessionary times so look to boost up your cash reserves.

Continuity Plan

While you may have thought your company too small for business continuity planning (BCP), now is the time to get it happening and driven by you, the business owner. The BCP identifies risks to the company and implementing safeguards as well as ongoing review of its fit for the business.

Organisational Change

Is your company optimised for doing business today? Permitting hot-desks and remote working is key to reducing overheads associated with physical places of work, i.e. offices, workshops. How adaptable is your business to change? Make sure your business can roll out a workable plan in tough trading conditions.

Marketing

Invest more in marketing, not less during a pending downturn. Choose marketing strategies with a proven high ROI and include digital marketing initiatives like proven SEO, contributing to your blog with relevant and unique content and also invest in social media posting. Perception really is everything and consumers respond accordingly, therefore make sure your business is controlling the narrative and this way, it avoids scaremongering and unnecessary consumer panic.

Your blog is your communications channel so let your website visitors know your business is robust and how it plans to weather softer economic activity through investing in its people and technology. Everyone loves a feel-good story especially when there’s a lot of pessimism, therefore, use your blog and creative writing style to put a smile on your blog readers faces, it may be the only one they get all day!

Distractions

Avoid negative news and other distractions that take your eye off your goals. Also, as the owner or manager, it’s your role to inspire your team, so they focus on their jobs and productivity levels are maintained.

Incentivise and Reward

Incentivise your staff to be creative and reward their ideas, especially when they improve sales volumes. Your high flyers will rise up and shine during trading troughs.

Perception

When your business is upbeat and eager to please clients with high-quality products and service, your confidence is rewarded with more significant market share. This is the time to build up your intellectual assets and future proof your company so it can take on more business in recovery.

Be Aware of Scammers, Spammers and Hackers

Opportunistic cybercrime and phishing are rife when there is a show of vulnerability. Make sure your online assets and systems are secure and be wary of offers of acts of kindness. Remember if it appears too good to be true – it is!

Summary

There will always threats to business survival and for leaders and entrepreneurs, this challenge is the attraction. Your enterprise can weather economic downturns by taking steps to fortify the company, irrespective of its size.

Start with a business continuity plan and implement a relevant recession-proof strategy that includes reducing debt, shoring up cash-flow, incentivising and rewarding innovation and ongoing marketing.

The fastest way out of a recession is to focus on the recovery, and your business will be more durable and more robust going forwards. A lesser company may lose ground that your company can take up and thrive in the next market upturn or boom.

BusinessBlogs is the popular online Hub for quality business articles. We publish unique articles and share them with our social followers. Read more on our 'About' page https://businessblogshub.com/about/

Continue Reading

Trending