Unless you have living on another planet, you might be aware that the UK has now hit a record recession. Experts had been predicting 2020 as the year of the recession anyway, but the global decline due to the pandemic has plummeted figures beyond what was expected.
The recession in 2009, mainly affected the financial sector. The impact of this one will be on the travel, events and retail industry. Well-known names such as John Lewis, Boots, M&S, British Airways, WH Smith and Debenhams are cutting jobs to save costs.
Despite measures such as the furlough scheme supporting businesses, how can you as an entrepreneur survive the recession?
We asked John Burness, Founder of Axiom Two and Author of Against All Odds to identify his key learnings from the last recession, and this is what he said:
Cut your costs
Ruthlessly cut your costs; get your spending down as low as you can get it whilst still trading. This will mean sacrifices of all sorts, but it will ensure survival. You can’t choose to be sentimental about anything.
Conserve your cash
Ruthlessly conserve your cash. Cash is King.
Borrowing won’t save you
Do not try to borrow your way out. Even at low-interest rates, debt must be paid back and will just cover up inefficiencies. Get rid of the inefficiencies instead.
Don’t try and sell your way out
The demand will probably not be there, and you will waste precious time and money in trying to find a buyer.
Look after your existing customers
Work with them if they are in trouble. Make sure that they are delighted by your response to the difficult business climate.
The recession can be an opportunity to increase efficiency and customer service.
Implementing new technology and systems can help with cutting costs and reducing inefficiencies. Know that you will get through it and that your business will ultimately be better for it
Remember that the only time your company will fail is if you give up
And remember to…
Smile about it. It’s not easy, no one said it was going to be. Your attitude and mindset can save a business from drowning.