There is no escaping the constant reminders of economic uncertainty and the cost of living crisis that we are currently experiencing in the United Kingdom, but despite what you may think, economic downturn doesn’t always have to be catastrophic to SME’s, with some business planning and courage it can be an opportunity to grow your business while others draw back.
We’re not doubting the difficult times ahead, but there are some silver-linings during a recession if you are bold enough to take the opportunity. Below we will discuss how to use a recession to your business advantage.
Hire top talent
Recession and redundancies unfortunately come hand in hand. While this is usually seen as a negative impact of a recession, it can also result in a large number of highly qualified individuals in the recruitment pool ready for your SME to snap up.
The majority of your competitors will be disinclined to hire during a recession, and therefore increases your opportunity to find the right people. The cost of hiring this top talent will pay off over the long term and once the economy has recovered, the remainder of businesses will be fighting over the remaining talent pool, usually having to offer above and beyond to encourage them away from their current jobs.
Benefit from better rates from suppliers
During a time of recession, companies are dropping prices and generally being more competitive which will be of benefit to your SME. Caution must be taken however, as holding stock that doesn’t sell will go obsolete and there is a cost to doing that.
Additionally, as businesses close their doors you may be able to benefit from reduced rates on services such as office space, supplies and technology.
Invest in marketing
It may feel natural to reduce your marketing spend during a time of recession, but this can be detrimental to the health of your business. You may find that many marketing agencies will be reducing their rates during an economic downturn and therefore giving you a better deal.
Additionally, when less businesses invest in customer acquisition, marketing agencies can cut through the noise and reach your customers quicker and can benefit from cheaper pay-per-click advertising. You can also benefit from more brand awareness as your competitors reduce their marketing efforts.
Take the time to reflect
As tempting as it may be, a recession is not the time to bury your head in the sand. It is time to take a step back and rethink the other all business strategy. We would always recommend doing this at least once per year anyway, but during a recession it is best to do this quarterly. This dedicated time will force you to focus on the business and for-see the bumps in the road before they come. And as we know from our deep dives into risk management, when you can see the danger ahead, you can mitigate them to reduce the impact to your business.
Invest in Finance support
You don’t have to navigate these troubled waters alone, when you bring an experienced FD/CFO on board you can benefit from their past experience, including previous recessions they have survived. Scores of your competitors will be experiencing the economic downturn for the first time and will make mistakes due to their lack of experience, so now is the time to ensure you do not make the same mistake.
A knowledgeable Financial Director will be able to provide your SME with the confidence and guidance to take the right actions during recession, to help you pull through to economic recovery.
They say ‘what goes up, must come down’ but the opposite is true for recession. Recessions have always been followed by economic recovery and eventually economic boom. Avoid solely focusing on the con’s of recession and instead focus on taking advantage of the pro’s such as competitive supplier prices and marketing opportunities. To really secure your business future, now is the time to invest in highly-skilled talent for your business.
A part-time FD via the Finance People not only provide your SME with a flexible and affordable solution to your needs, but their wealth of knowledge and experience will help you thrive during a recession. Get in touch for more guidance on how we can help you.