On 3rd November 2022, Sage reported that ‘The Bank of England believes the UK is going to fall into a long recession’.
They wrote that BOE ‘raised interest rates again on 3 November 2022, from 2.25% to 3%, with a belief that a recession could last two years in the UK.’
Undoubtedly national economic difficulties will hit us all in some shape or form. But what are 4 essential things small businesses can do to best protect themselves from the blow of a recession?
Sage’s article writes:
‘With supply, production and sales all being hammered, it’s hardly surprising that profits and, particularly in the short term, cash flow have also suffered.
A survey by business support organisation Business Growth Hub, of around 2,000 businesses in Manchester in early May 2020, found that over a quarter (27.5%) of companies had no more than three months’ supply of cash.
And, worryingly, a further 20% were unsure of their cash flow time frame.’
Consider negotiating payment schedules with suppliers, or taking advantage of any discounts offered for early payments made before the agreed date. Place more focus into employee satisfaction and retention, providing them with drive to put in their best performance for the business, and minimising the need for further hiring.
No matter the size of the supply of finds your business has available, controlling costs is about making the funds you have go further. Are there certain costly systems currently in place that could be made more cost efficient? Can you find areas to slim outgoings without compromising the quality of your business, or its value to both the public and your employees?
Analyse data and projections regularly, and implement necessary changes reflecting what these show. Refer to and adjust your business plan accordingly, ensuring you have a clear set of long and short term goals to focus on, and a roadmap of how you are going to reach them. Diversify your customer base, so as to rely on a range of customer sources throughout a particularly difficult time.
Invest in developing new skills that will put you head and shoulders above your competitors, through training sessions or online courses. Continuing to learn and grow will act as a motivator to innovate, helping you to stay ahead of the curve, even amidst economic uncertainty.
If you would like to discuss further about how to ensure your business is in the best place to tackle a recession, please don’t hesitate to contact me at tomhosking@actioncoach.co.uk
