There are now so many pundits predicting the next recession that even if one wasn’t imminent, it is almost certain to become a self-fulfilling prophecy. Here’s an example from Fortune magazine: “A significant slowdown or even recession is coming sooner or later, and it’s probably coming sooner than you think. It always does.”
If that worries you, now's the time to stop worrying and start preparing. Fortune favours the ready. Here are steps 6 - 10 in our exclusive 10-Step Programme for Futureproofing Your Business.
Step 6: Get flexible
It’s human nature when crisis strikes to stay where you are, to cling to what you’ve got, to freeze. Remember those videos of holidaymakers just standing on the beach in Thailand, transfixed by the sight of the oncoming wall of water just before the tsunami struck? What about the passengers in the Titanic who remained in their cabins rather than race for the lifeboats?
Hope is not a strategy in business. If what you’ve got isn’t working especially well now, clinging to it in a recession isn’t going to work at all. Now's the time to make improvements, innovate and perhaps even pivot completely. And even if your business is working well, this isn't the time for compacency. Your market may change, so you will need to be ready to adapt. Think about worst-case scenarios and start planning for them.
Step 7: Think lean
Some would tell you to reduce debt. But the fact is, reducing debt isn’t easy. Yes, you could sell plant and equipment and lease instead. Ford did that prior to the GFC and they were the only US car manufacturer that didn't have to be bailed out by the government. Or you could restructure your debt. One of the positives of a recession – yes, they do exist – is that interest rates tend to drop. But let’s face it, interest rates are already pretty low.
Lean business isn't about saving money by doing nothing or worse, cutting the heart out of your business. Lean business is a way of thinking. It's about taking a hard look at your business and figuring out the most cost-effective ways to deliver value to your customers. That may mean leasing rather than owning non-strategic assets. When it comes to your most valuable asset – your people – it may mean developing greater productivity and capability. Some processes may be able to be automated or outsourced to create greater efficiencies.
Here are some things NOT to do:
- Don’t start shedding staff – that will only put the wind up your other employees and start them looking for more stable employment elsewhere.
- Don’t try to put the squeeze your suppliers – that will only weaken your relationship with them. By all means, sit down and talk about mutually beneficial ways of taking cost out of the supply chain. Or look at other supplier options.
- Don’t drop your prices. It may help you build market share, but at what cost. Instead, look at ways of locking in your existing customers and gaining new customers by adding more value than your competitors (seeStep 2 Get your customer value proposition right).
Step 8: Don’t stop marketing, just do it better
The natural inclination when times get tough is to cut, cut, cut. But a study by consulting firm McKinsey of companies which emerged healthiest out of the GFC revealed that one of the keys to these companies' success was consistent marketing. Having said that, a lot of marketing expenditure goes to waste. I should know, I have an MBA in marketing and spent many years in senior marketing roles. More recently, I have spent time figuring out how to market smarter – that is, get better results without spending more money. (If you
contact mefor a free Initial Consultation, I would be happy to share them with you.)
Step 9: Build your reserves
Step 10: Maintain a fun work environment
Richard Branson is a billionaire who appears to understand that fun can have a positive ROI in business. Happy employees equal happy customers, and at no time is having happy customers more important than during a recession. Building a supportive, secure and optimistic team culture when everything else is gloom and doom will give your business a competitive advantage.
Finally, remember that recessions generally only last a year or two, and it's never too early to start planning for the upcycle that inevitably follows.
Pre-order my new e-book and get yours first
You’ve just discovered the first five steps in my forthcoming e-book Beat the Bust: 10 Steps You Must Take Now To Thrive, Not Just Survive, the Coming Recession.
This e-book expands on the ideas you’ve just read about with more detail on how best to prepare your business for the next recession and case studies of companies which did more than just survive the Global Financial Crisis – they thrived!
Beat the Bust: 10 Steps You Must Take Now To Thrive, Not Just Survive, the Coming Recession
is due out in April 2019. To make sure you receive your free copy as soon as it becomes available, order yours now and we’ll email it to you the day it comes out.
Don’t wait until it’s too late. Pre-order now using the form at right.
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I'm Robin La Pere, no ordinary business consultant. I've been a corporate leader and owned my own businesses, so I understand the impact that recessions can have on businesses which are unprepared.
The experts say the next recession is on its way, so I've taken the initiative of producing an e-book incorporating everything I've learned over the years about getting businesses ready for economic downturns before it's too late.
I've packed
The No Ordinary 10-Step Programme for Futureproofing Your Businesswith great case studies of businesses which have not only survived previous recessions, but have actually thrived. I've also created a unique Anti-Recessionary Business System with a checklist of proven measures you can take to protect yourself and your business.
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