Surviving an Economic Downturn

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The most important thing that can guide us is past events. Even though this is not an indicator of what the future may hold, we need to use tools we have gained from experience to help us bounce back quicker.

There are a few similarities between the 2008 recession and what is happening currently: the uncertainty in markets, including consumer markets, the dramatic fluctuations in stock exchanges, and the political reaction of ‘whatever it takes’ to survive and succeed makes economies unstable and worried. All around the world are indicators that we are in a recession.

It is true than many things are quite different, but this blog is about surviving and planning for the worst 😊

Innovation has never been so important as it is now. Everything is going online, and we need to adapt or be left behind. Businesses are quickly moving or have moved to having an online presence. If your business can move online, DO IT.

Use technology to stay in touch with your customers and clients. Show them you are still here and ready to help.

Companies often invest in IT during a downturn as this is the ideal time to take the opportunity to lower business costs by improving processes.  Investing in the right technology can make it easier to do business.

If this is a recession it is a good idea to try and do the following in your business earlier rather than later.

  • Build up an emergency fund if possible. There are a lot of people saying that they have a large cash balance in the bank now because they do not need to pay for so many expenses. Keep that money and if you are a director, consider not taking a big salary or dividend to allow the business bank account to grow.

  • Prepare a budget and stick to it. Hold yourself accountable and look at it regularly. 

  • Try and pay off debt. This will ensure that when things turn around cash flow doesn’t need to be spent on old problems.

  • Diversify your income streams if possible.

  • Get rid of unnecessary expenses and try to make your business leaner and more agile.  There are plenty of suggestions out there about how to do this, and of course, we will be happy to discuss this with you. 

Try not to incur more debt than is absolutely necessary. Your business might survive the recession only to face bankruptcy after the downturn due to excessive debt and loans.

Things will eventually turn around. It will likely take a few years, but there will be a new and beautiful spring in our economy, and those who survived the winter will be able to prosper. 

If you would like to chat to one of the Anlo ladies about options for your business to move online in terms of your accounting software get in touch.

We love helping all businesses and the first consultation is free of charge.