We’ve all been on the news. Everyone’s talking about it. The cost of living crisis is forcing people to stop spending money in the way they normally would. And as a result of that, the economy is starting to slow down. People are predicting over the next few years it’s going to get very, very tough in the economy and we will be in a recession. Obviously, COVID was tough, but the next recession’s going to be worse that that apparently, but that’s pure speculation. The main thing is what we need to do is start focusing on what you can do to get your business ready for that recession. This is part one of a series on the upcoming recession, because there’s a few important components. Part one is about the importance of getting the right people in your business and as suppliers to support your business through really tough times.
When you think about what happens in a recession, the world doesn’t just disappear overnight. What happens is the economy starts slowing down. Eventually, the hype around the economy becomes a self-fulfilling prophecy and people stop spending, businesses stop investing, and everything just slows right down. It usually stays that way for a few years, and then things start to pick back up. Obviously, recessions can be extremely challenging for a lot of businesses and people, but they can also be an opportunity for businesses. Some of the best businesses have started during recessions.
Why a strong team is important
Why do we need the very best team around us and the best suppliers to work with when we’re going into a recession? For your business to survive and come out the other end thriving, you’ve got to have a team that has perseverance; everything gets tougher during a recession, so the kind of people you are working with, they’ve got to be hardworking.
You need to have an imagination on top of that. To really make money, people have to start thinking outside of the box. Another part of this series is about diversification, to diversify your business so it can thrive during the recession. You’re going to need team members who can adapt and have the imagination so that you can actually adjust your business to deliver what people want at that time.
One of the other things that you’re going to want from your team is just competence. In a recession, the margins are much, much, slimmer – everything that goes wrong in your business you will feel a lot more than you would. For example, if a member of your team or a supplier is going to make a mistake that then costs your client, that client is going to be a lot harder to replace. It’s essential to be proactive and make sure that your team is working in a way that you’ve got the right people doing the right jobs and they’re putting the clients first.
One of the biggest mistakes business owners make
One of the knee-jerk reactions to going into a recession is business owners will try and save costs everywhere they can. Often, one of the biggest mistakes they’ll make is they will cut back on team members who are really good at what they do or just because they’re the cheapest to cut because of low redundancy pay outs (rather than the ones they really need to lose). The other thing is, they will cut back on suppliers and pay for services that are cheaper, but they won’t get the same quality of support and advice. And that’s an incredibly dangerous thing in a recession.
Surround yourself with the right people
This is just point one of the series. We’ve got to surround ourselves with the right people, because the qualities that will get you through a recession, and help you thrive in one, are essentially perseverance, hard work, imagination and competence. All I’d say is just have a look at your team and the people you work with in general. Try not to be negative about it, but don’t just look back at everything through rose-coloured glasses. Think about how the people you’ve surrounded yourself with will react when the chips are down, when things are really tough for your business. Will they prioritize your relationship? Will they still deliver the same level of service? Will they go that little bit further and do the things that your business needs to survive and thrive? If the answer to that is no, then now is the time you can actually start making those adjustments.