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Posted by Sarah Brown on 28 Nov '22
Recession: threat or opportunity
Like me, you may get to the stage where you avoid the news because it always seems terrible. As the saying goes, "we're going to hell in a handcart!". But are we?
Recessions
I started my business in a recession and have traded through a few, but when I think back, what was different?
The elements that make a recession stressful are:
- Inflation: how to keep up with rising costs
- New business: how to attract people to use you when they are short of money
- Bad debt: how to avoid/manage the threat of customers going bust on you
- Uncertainty: planning for the long term and coping with the unexpected, like changes in taxation
All these combine to put pressure on the viability of a business, social enterprise or charity. Bizarrely this recession in the UK also includes recruitment problems unusual in a downturn where generally there is high unemployment.
But really, the thinking that will address these issues is what any well-run organisation should be doing at all times. Good times make us lazy and unfit. Walking on the flat, you don't notice you are unfit; you realise when you meet a hill, you need to get fitter to climb it. It might be that the mountain is too difficult to climb, so the choice is to change you or your vehicle or take a different route.
This recession is an opportunity to review and refocus. The challenges of a recession are a chance to refresh our skills in running organisations.
In future blogs, I will focus on each of the elements you need to address, but for now, I will give you an example of how one business has responded to changing market conditions rapidly.
A local cafe has found its custom reducing so that, though full at lunchtime, it does not get good business at other times of the day. It has decided to refocus, closing the cafe and opening a sandwich bar close to a railway station and large office block where it can use its catering skills for a different market which should be more sustainable. It has addressed the threat and created an opportunity.
Consider what you should be doing.
Now would be a good time to do a business plan for 2023. Read this blog to get some ideas:
How to produce a business plan that can really create success for you
Tags: business planning