There are a number of strategies for business survival during a recession, but I would like to summarize you few one. Here recession refers to economic recession. Economic recession is not a new term rather the world is well familiar with this term.
As you know, every country experiences a varied economy depending upon crisis and policies. A number of factors influence the economy. Some elements are related with international policy or product price change, whereas domestic production and government decisions also have an impact.
Now we come to the point of recession.
What exactly is a recession?
Recession refers to the slowdown of businesses and economy of a country or countries. When we notice that there is continuously declining of the business cycle for a long period then we can say that it is a recession. Nowadays there are so many international agencies, which report economies through analytics.
When a majority of the countries of the world report slowdown in their economy, then it is called a global recession.
Past recession in the world
After world war II, four times global recessions declared. These were in 1975,1982,1991 and 2009. These recessions badly destroyed the world financial markets. GDP of most developed countries was crawled. The jobs from the market disappeared and the term evolved as the Great Recession. Many business analysts have written articles on the strategies for business survival during a recession.
Business challenges amidst COVID-19 Pandemic
The Corona virus disease has been declared pandemic by the WHO. Hence, with the widespread fatalities, country heads are forced to lock down the daily activities across the nation.
In this position, it is evident that businesses are battling to hold out. No output, no sales, no work obviously reduces the health of all sorts of manufacturing.
Many nations have announced a great package for industries and workers to scale down the impingement on the economic system. As you know that most companies survive because their profit and debt are proportionate. In this situation of lockdown, companies showed the profit as nil whereas liabilities remained as such.
Businesses which have substantial financial assets are still in the comfort zone. Merely in the near future if the problem persists, they may as well look for schemes to survive.
Online Businesses notice a surge
During lockdown people are remaining at home and consuming huge data for entertainment and other functions. Data provider companies such as Airtel, Vodafone, Jio have noticed growth in their business.
Now I would let you know what steps or strategies you should adopt so as the negative impact could be reduced.
Strategies for Survival of Business
Smart Finance Control:
You should establish your business’s daily inputs and outputs in a key indicator system. It hardly matters how small or big your business is. You have to keep an eye on your bank statements, profits and losses on a daily basis. This is your responsibility to categorize your services or products as per their profitability.
You keep more profitable and more consumable products in your category. You can reduce items from your inventory which are less profitable and less productive.
Cash Item Promotion:
You understand your business better than others. If you are in the production industry or trading, then you should promote those items which could be easily converted into cash. This will help you to survive longer in the business. If you are in the service industry, then you nurture those clients first whose payment, delivery record has been good in your list. This method will consume less energy and provide you better output.
During the recession period, one of the best measures you should adopt not to spend on advertising. Adverts is the game of making brands in the long run. If you desire to come out of recession symptoms, then either end or at least scale down your expenditure in all varieties of adverts.
Marketing during a downturn:
Marketing is a significant part of any business. There are continuing expenses on successful marketing. During recession as you concentrate on lowering expenses, therefore, go on your marketing budget limited which is most indispensable. You can cut bonus, incentives and other perks of staff.
Consult Your Bank for Remedial Policy
If your business has taken a loan or credit limit from a bank then you should keep an eye on the increasing interest. All banks of the world do not want their client to become a non performing asset. Hence, on request by the customer, they agree to negotiate in terms of rate of interest or other possible rebate within their limit. You should as well leverage this benefit.
Conclusion: Business Survival During a Recession
Economic recession hit the market of all sectors severely. Nevertheless, possible positive steps are always helpful to pull through in the tough situation. Take valuable advice from your financial consultants and obey regulations. Keep your business credit in good shape. You remember that this situation will end soon and your business activity will be in the right shape. If needed, thin out your employee’s earnings and other expenses which you conceive could be subdued.
- 1 What exactly is a recession?
- 2 Past recession in the world
- 3 Business challenges amidst COVID-19 Pandemic
- 4 Online Businesses notice a surge
- 5 Strategies for Survival of Business
- 6 Conclusion: Business Survival During a Recession