Recession literally means “the act of going back, of receding…”
Economic pundits have hijacked the word to mean “a period of temporary economic decline during which trade and industrial activity are reduced…”. It is usually heralded by a fall in Gross Domestic Product (GDP).
According to many commentators on the state of the UK economy we are about to revisit recession.
The cause this time around is not the failure of the banking system, but our imminent withdrawal from the EU. Most informed sources on either side of the remain-leave debate are resolved that our exit from the EU will slow-down economic activity in the UK in at least the short term, and there is a possibility that we will experience a “temporary period of economic decline”.
If so, how do we cope with recession?
On a personal level, we generally cope best with physical stress if we are fit and healthy. Our suggestion for weathering economic stress is roughly the same: we need to get financially fit. For example, we would suggest that businesses large and small should be considering:
- Selling any assets that are no longer used in your business – convert redundant assets into cash and free up space.
- If you have spare floor space, what are the opportunities for sub-letting? Convert unproductive real estate into an income stream.
- How much credit do you allow customers? Could you reduce your average days credit allowed and shift your money from your customers’ bank accounts into yours?
- Do you have a three to five year business plan? Has it been tweaked to reflect the effects of a Brexit slowdown?
- Have you undertaken a risk assessment of the impact of disruptions to your supply lines?
This is by no means a comprehensive list of to-dos. Every business will likely experience their own unique challenges in the weeks ahead, what is clear is that we should be getting match fit to face these challenges.
And as we have said before, this getting-prepared activity will not be wasted whatever the politicians finally decide is the best course for our EU exit. There are no downsides to being financially fit, it will always allow you to hit the ground running.
- we haven’t spoken to you about the challenges that your business may be facing in the coming months, call now so we can start to create your business fitness training program. If recession becomes a reality, we would suggest running at the front of the pack is the best place to be.
- Are you ready for 1 January 2021? - November 25, 2020
- Furlough claims from 1 November 2020 - November 24, 2020
- Are you eligible for further self-employed grants? - November 19, 2020
- Current businesses subject to lock-down - November 17, 2020
- Are you eligible for Universal Credit? - November 12, 2020
- Government financial support extended - November 9, 2020
- Get ready for end of EU transition period - November 5, 2020
- Are you making the most of your accounts data? - November 4, 2020