Sharply increasing interest rates, red-hot inflation and a prolonged energy crisis are leading to conviction that the UK is headed towards recession.
The Alternative Board (TAB), which runs leading business advisory boards across the UK is advising SMEs to get recession ready now to survive what is predicted to be a prolonged downturn:
“SMEs are crucial to the UK’s economy and account for over 53% of private sector employment, so it’s vital they ready themselves now for a potential recession,” commented Ed Reid, co-owner of The Alternative Board. “We’re here to ensure our SME facilitators and the businesses they support come out fighting and do all they can to mitigate against the 2.7 million job losses experienced in the last recession.
“Putting clear strategies in place is imperative to maintaining income streams and protecting assets during a downturn. SMEs that invest time now in fully assessing all aspects of their businesses, cutting back where they can and readying themselves for a downturn will be in a far better position to ride out a recession.”
With peer-to-peer support central to the commercial success enjoyed by TAB members across the UK, the company has pooled together advice from its business owners who experienced the country’s last big recession in 2008. All believe being part of TAB will help them survive the next recession.
Here are some top tips for SMEs facing recession for the first time from TAB’s business community:
1) Stay positive! If you have a robust product/service offering and you manage your team and your cash well then you will almost certainly come through a recession stronger.
2) Review your business plan – identify how external impacts might affect it and look at how you can mitigate them.
3) Review your product/service offering, people, and processes regularly and cut back on discretionary spending but be careful what you class as discretionary. Marketing spend is often cut when times are tough, but the reality is, it’s when you often need it most.
4) Focus on the positives, don’t make rash decisions without proper analysis, and make sure you know how your figures work.
5) Communicate regularly with both suppliers and customers. Make sure your relationships are as strong as possible and that you have a Plan B if any start to struggle.
6) Keep your workforce engaged and a part of the process when changes are made.
7) Recession doesn’t mean downturns for all, stay alert and seek out new opportunities.
8) Collect your debtor money when its due.
9) Remember CASH is KING to SMEs, ensure you have funds to maintain your cash flow.
10) Work with your financial advisors and prepare a plan for how you would respond to different levels of revenue reduction.
TAB has created a free Recession Ready online hub to help SMEs across the UK prepare for a downturn. Featuring business guides and insights, an ‘8 ways to get recession ready’ blog, plus a Recession Ready quiz, the free resources can be found at www.thealternativeboard.co.uk/recession-ready-resource-hub.
TAB is a membership model where members, who are owners of private businesses, pay a monthly investment for business advisory and coaching services. TAB SME facilitators nurture the growth of local businesses, deriving immense satisfaction by facilitating positive changes in the lives of local business owners. For more information and to find your nearest business advisory board please visit www.thealternativeboard.co.uk.