The economy is like a roller coaster ride – it has its ups and downs. When those downs hit hard and linger, we find ourselves in an economic downturn or recession. It’s that phase when economic growth slows down that businesses face challenges and people’s wallets feel a little tighter.
In the face of a serious economic downturn, you need a solid plan to ensure your business remains stable, maximises its chances of survival and comes out on the other side even stronger.
Here are five steps you can take now.
1. Get your team onboard
Ensure your team is aligned with prioritising expenditure savings and revenue opportunities. Empower your team, giving them the autonomy to make well-informed decisions that contribute to the overall resilience of the business.
2. Plan for extended revenue reduction
Take steps to secure the stability of your supply chains, ensuring operational continuity. Develop a comprehensive plan to navigate extended periods of reduced revenue, accounting for potential challenges.
3. Safeguard your customers
Strengthen your relationships with key customers, building trust and loyalty with your customer base. Keep a close eye on the implications of downturn for marketing, sales, and pricing.
4. Boost or expedite incoming cashflow
Actively collect outstanding debts and receivables. Explore government grants and support available or bank loans if necessary. Diversify your income with a side gig or investments generating passive income.
5. Trim or postpone expenditure
Identify opportunities to adjust payroll, including options like unpaid leave or part-time work. Work with your landlord for rent adjustments; review existing loans and discuss repayment terms with your bank; communicate with suppliers to potentially revise contracts.
If you manage to weather the storm, once the economy starts to rebound (and it will eventually), it’s time to gear up for what comes next: the bounce-back and recovery phase. With a strategic mindset, adaptability, and the lessons learned from navigating the downturn, you can position your business to not only recover but also thrive in the evolving market conditions.
Need some help navigating the challenges? Get in touch.
