Developing a recession strategy
Surviving the recession.
Most businesses survive a recession. Most businesses come out of a recession severely harmed. They have had to make cuts to get through it and have lost important resource that has taken years to build.
The biggest danger of a recession for most businesses is not liquidisation but the impact of making non strategic cuts which result in the business being more severely weakened than it should be when the recession ends.
It is so easy to panic and look to save money in the short term wherever you can, without thinking about the strategic significance.
When the recession ends, the firms that have reacted strategically to the recession will start to pull ahead significantly.
Certain businesses will benefit from a recession, as buyers look for lower cost substitutes in hard times and savvy operators will look to diversify their product range to cater for this phenomenon.
For most businesses, of course, the recession means a lot of pain but there are upsides.
Positives
The weak pound means that it is now much easier to export to Euroland.
- Products manufactured in Britain are now in effect around 25% cheaper than they were a little over 12 months ago.
- The lowest interest rates for 300 years means that it is cheaper than ever to borrow money to fund expansion.
- Its harder to get funding but banks have to lend to someone and if your plan is sound and you can demonstrate little risk, its possible to get funding.
- The government is about to extend its loan guarantee scheme significantly and combined with ultra low rates, that affords a great opportunity.
- There are plenty of export markets not as badly affected as the UK.
- Now is an excellent time to buy capital equipment. Sellers are falling over themselves to get sales and discounts are massive. On imported goods however, this situation will be short lived as products will soon have to reflect the poor exchange rate. This also means that there are great opportunities to sell British made products in the home market.
- Your competitors are laying off highly trained staff who are a key element to their competitive advantage. Companies with a recession growth strategy are snapping them up with glee while their competitors shoot themselves in the foot.
Recession strategy
PHCT can help you get your recession strategy right for the recession so that you not only survive it but come out of it stronger than your competitors, simply by making more strategic cuts. You could even consider joining the elite by investing and growing through the recession.
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