Now it is evident that the recession is with us, it is a good time to reflect on what we could do to help our business survive and grow during and beyond the recession. A brief explanation of what is possible follows.
Risk Management is not just about saying no, it is all about evaluating the risks and opportunities properly when they occur.
In order to survive beyond the initial stages of the recession, business people will need to realise that total risk prevention is never possible, and is in fact, also unwise. Management of risk needs to be approached sensibly because otherwise positive opportunities to grow the business will be missed.
Business Models will need to be realigned as we are now operating in a completely different world to the one at the beginning of 2020.
No longer can we look to go forward with blind enthusiasm and a hope we will survive. The main game is to now win the war of survival in the short term without jeopardising the long term future of the business. Creating a profitable business is still possible in a recession by:
- realising that the full effects will not be experienced for another 3 to 12 months;
- realising that a raised invoice is no guarantee of a sale;
- there is more than one way of selling, and saying NO, can be one of these ways;
- constantly communicating with your customers and suppliers on a person-to-person basis;
- reducing inefficiencies which cost money to repair without increasing profit,
- employing professional and experienced people;
- not reducing the hours worked and employee numbers until absolutely necessary; etc.
Working short staffed is a fatal mistake as it creates inefficiencies, increased costs, and in time, makes quality and professional employees look inefficient.
It also means rebuilding the business from within, because of the natural attrition of employees, will be difficult. Even more damaging, is if the more competent employees end up with your competitors, or start up their own business in competition.
Thinking positively is essential in winning the fight to survive and grow in this recession.
Thinking positively allows you to stand out amongst your competitors and retain employees for as long as possible and take up quickly those opportunities which are still possible in a recession. In order to survive and stand out from your competitors, please also refer to the points below.
Standing out from your competitors means:
- have an espoused greater customer service ethos than that of your competitors;
- willing to help your customers to also survive;
- always having a product or service available as and when the customer needs it;
- willing to supply customers of all sizes profitably;
- avoiding mistakes which annoy customers;
- rewarding long-term customers and not just new potential customers, with promotions and special offers, etc.
In conclusion, it is evident that the recession is with us. Now is therefore a good time to reflect on what we could do to help our business survive and grow during and beyond the recession.
The world has changed. It is no good surviving in the short term if your strategies and behaviour jeopardises your long-term survival. Making realistic assessments of the opportunities during a recession is therefore essential. Utilising risk management principles along with a positive attitude, allows you to make better decisions for the long term.
Further information can be found in these two features, “The Anatomy of a Recession” and “What will the future look like in 2020 for B2B Credit?” which can be found at www.creditmatters.com.au or you can contact Kim at kim@creditmatters.com.au for a confidential discussion of future possibilities.
