The UK economy has been shaken after the Brexit vote. With a decline in sales and a weakened financial position for SMEs, there is a serious possibility of recession approaching upon the country.
So, how can your business prepare itself from a potential recession like situation? Will you be able to survive the competition in the market? Rather, is your business adapted for dealing with a recession?
You need to know for a fact that the market shrinks during recession. So the people who willingly want to purchase your products or services decrease. This means every business in the market will be changing their marketing strategy to win over the remaining customers. Hence, there is going to be lots of competition! And for survival, your business needs to make a way through it all.
To help you in such a situation, follow the five steps given below.
1: Plan Ahead
It is important that businesses plan ahead of time and not just hope for the best, especially while facing a serious situation like recession. Your business will be able to attain sustainability if you work towards achieving it. Business owners need to know what they are trying to achieve and what they plan to achieve in the next 5 years. It is not necessary to chalk a detailed and impressive strategy, but having a strategy in place is a must.
2: Draw Up an Action on How to Get There
Depending on the strategy you drew up, you then have to decide the short, medium and long term actions that you need to perform. This will help you determine specific actionable things you need to start working on (eventually or immediately). We understand that there are big things which you need to improve upon and achieve. But as a leader, it is your responsibility that you break them down into management parts along with other little things. With all this, do not forget to prioritise the work.
3: Forecast Your Money
Like we mentioned it above, it is important that you plan ahead in time. The same is with the finances. You need to prepare a 3-year financial forecast or at least ask someone to do it for you (your accountant). Calculate the costs and expected benefits theoretically drawn from the strategy you implied above.
Businesses can try cutting their revenue in half to see how thing work out then; just to know how their business will function in case it actually happened. This will not only give you early warning signs when you might run into the problem for real but also keeps you prepared for the outcomes in advance.
If things tend to get really difficult (financially), you need to move your monthly cash flow forecast to a weekly one. All the more, you can also apply for cash flow finance for a smooth functioning of your operations.
Don’t wait from problem to hit you, prepare for it beforehand.
4: Spend Time Working on Your Business, Not In It
To implement the strategy you have drawn, it is important that you start working on your business instead of working in the business. The difference between the two for instance is, renovating your house and just cleaning it.
We understand that it will be too much work throughout, but the end results are worth it all. It is pointless to blindly keep maintaining the system when it actually needs a change. Maintenance is important but remembering it won’t be pushing your business towards success is equally important.
It is important to keep your business upgraded in every area. If you find yourself caught up with other things, you simply find someone to implement the action plan for you.
5: Do Not Stop Marketing. Keep Doing Better!
When a recession like situation approaches, most businesses reduce their marketing budgets. Well, be alert on how you go about on this one. During recession, every business should have a marketing plan that links both, their strategy with their general business action plan.
Marketing should not be seen as a cost – it should rather bring in more business for you in monetary terms than spending on it. Also, measuring the effectiveness of your current marketing strategy is essential.
Especially during recession, it is important that you take marketing seriously. You have to make it more effective (instead of blindly cutting costs) as you certainly don’t want to lose out on your customers.
Recession can give businesses a difficult time, but don’t panic and don’t give up. Instead of waiting for the arrival of such a situation, what you can do about it now puts you in a better position than others. Look at it as an opportunity to build a stronger, more reliable and efficient infrastructure that helps you outperform your competition.