How to survive and thrive in a recession
With the UK economy in recession we give our take on surviving and thriving in a down-turn.
don’t panic
Economic activity is expected to fall by 2% in 2023. Whilst no-one is expecting things to be a walk in the park, it’s easy to forget that 98% of the economy will continue as usual.
Some sectors will suffer more than others, but some sectors will continue to grow and some will emerge for the first time, driven by a new economic landscape.
The main point is that we do not need to plan for catastrophe. Recessions are a fact of life, the vast majority of businesses survive them, the smart ones will use them to their advantage.
Focus on Value
It’s easy to assume the public will be looking for cheaper options. It is true that generally people will become more money conscious, but we assert people will be focused on value for money rather than simply looking for low cost solutions.
In recession more than ever we need to understand the value our customers are looking for and make sure we are delivering that at a reasonable price.
Another side to this may be realising that you can provide value to a client base that you haven’t previously considered, through a channel you hadn’t thought about or in a format or package that hadn’t been considered.
Recession is therefore a very common and productive time to diversify.
Run a tight ship
Clearly if we are focused on delivering value we cannot be passing on the cost of inefficiencies to our customers.
Plus if cash flow gets tight we need to make sure we are not haemorrhaging money. The obvious focus here will be our suppliers, but as ever there are probably more important factors to consider:
Time. For most of us we spend more on staff than anything else. Eliminating unnecessary activities and unproductive ways of working should be a priority.
Discounts and undercharging. We need to cut out undercharging and minimise discounts.
Credit control. We need to be very wary of bankrolling our customers.
More than ever we need to be managing our business and working on improving and honing its performance. We should keep a close eye on our numbers and act decisively if we see problems emerging.
nurture your relationships
When times get tough you will need to rely on your business community to see you through. That means your staff, your customers and your suppliers.
At critical junctures, it will likely be these constituencies that have your back. We need to help where we can so that we have goodwill in the bank.
be ready to grow
Surprisingly the growth that comes at the end of a recession is a big danger point for businesses because growth uses up cash and running out of cash is the death knell for business. So take care to plan cash flow as you grow.
Coming out of recession your weaker competitors may have gone to the wall. Your own business will likely be leaner and more productive. It’s now time to scale and a big part of thriving in a recession is putting oneself in the best position to take on new business at the point that the economy grows again.
