Recession Immunisation

Protecting your business against the impending crisis.

Financial management and cost control.

Economic downturns are a fact of life when you’re running a business. But the current circumstances are simply beyond the scale of anything we have ever experienced before.

With no clear blueprint about how to navigate a pandemic, there are a number of clear steps you can take now to prepare your business to weather a storm and emerge even stronger. Business owners and senior managers often know they should be prepared for tough times, but they don’t always take the necessary steps

Here are a couple of important pointers that highlight the things that you can control, and help immunise your organisation against the imminent recession

1. Focus on your finances

Solid financial management is vital for ensuring your company is ready to weather an economic downturn. Businesses need to have early warning systems to let them know when trouble is brewing. The pandemic has created a financial crisis.

The numbers tell you the truth about your business and you need to embrace them. Companies should set up a cash flow planner. Use a spreadsheet to record projected revenues and expenses for the next 13 weeks and then update it each week. This allows you to get a handle on when payments from customers are expected versus when suppliers must be paid.

2 Controlling your costs.

It is important to get to grips with this key area. As a manager or owner, you should have a detailed knowledge of your fixed costs and overheads. Unfortunately, this is often not the case. It should be remembered that for every ￡1 saved, it is the equivalent of ￡10 generated in revenue. All organisations, no matter what size, should undertake a detailed review every cost in the business. If there are costs that you don’t understand, there are expert cost control consultants who can assist in this area.

3. Stress-test your business

As the pandemic has proved, some circumstances simply can’t be foreseen. That’s why it’s important to run through various disaster recovery scenarios. Once government support has been phased out, you are on your own. Ensure you put suitable contingency plans in place to deal with them. Now! Remember, lack of suitable planning will derail businesses.

Lessons learned

·        Get help—Hiring consultants and setting up an advisory board are ways successful businesses get external advice.

·        Map it out—Developing a strategic plan with specific targets will help to keep your business on track even as economic conditions change.

·        Master financial management—Keeping tabs on your finances allows you to plan better, see trouble brewing and react quickly.