The United Kingdom has been in a state of recession since 2008, impacting individual businesses around that country…and around the world. In the time since the start of the recession, their gross domestic product (GDP) has flittered between minus figures, unable to escape the abysmal commercial challenges of the ongoing recession and debt crisis.
Local UK retailers such as La Senza, Pumpkin Patch, Firetrap and the Game Group have all fallen subject to administration in 2012. Just under thirty additional firms entering liquidation makes the first five months of 2012 one of the worst years concerning business deaths since 2008.
It’s not just retail. Businesses of all sizes are suffering. Insolvency Direct’s most recent Statistics Release confirms that ‘there were 4,242 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the third quarter of 2011’. This figure represents over a six per cent increase on the same period the previous year.
With no promise of any recessional recovery and with the most recent UK economic forecasts from HM Treasury predicting a mere 0.2 per cent growth in GDA for 2012, protecting your business from any potential financial difficulties could be the key to keeping your company afloat.
The statistics above are centred on the UK, but with the global economy and the ripple effect that a downturn in one area can now have on the rest of the world, the items below apply to anybody who owns or makes decisions for business operations.
Cut Basic Costs
Consider the price of your business electricity and other energy resources. Searching around for the best rates within a comprehensive business package can instantly save you money as well as provide your business with valuable services to further reduce your energy bills.
As the country’s companies gain ever-expanding erudition surrounding ecological issues and energy efficiency, the availability of advisory services will increase continually.
To meet the demand generated from government legislation and to keep a consistent consumer base, energy suppliers are willing to watch a dip in the price of business electricity for individual businesses, in exchange to benefit from attracting new customers with energy efficient schemes.
As well as the price of business electricity, be assertive regarding wasting heat. Managing temperatures within the workplace by closing and opening doors and windows, is a cost free option which often falls second to air conditioning and heating.
Maintain Effective Marketing
When times are hard it is tempting to make cuts. As more businesses shy away from what may be regarded as unnecessary expenditure, it is essential that you budget to maintain any effective marketing systems your company currently exerts.
Clients, regardless of industry, are in similar positions. Whether you deal with business to business (B2B) or the public, the current climate has affected all. Not only must potential customers be introduced to your company to bring in new business, now is the time to remind existing customers of why they require your services.
In a time when all budgets are tight, consider cost efficient promotional tools, such as email subscriptions, electronic newsletters and work on your online social capital to create a strong social media presence.
Stick With Your Staff
Overheads can seem to be a detrimental drain on your potential profits, but sacking staff and making employees redundant during a recession should be considered as a last resort.
While rotas may need adjusting and hourly recruits minimised to reflect monetary issues, now is the ideal time to train contracted workers in relevant areas and invest in enhancing their customer service skills.
Redundancy pay outs can be costly. In the hope your business survives the recession, you will most definitely need to re-recruit for any positions you dismiss during the downturn. Rather than opting to pay out, use valuable team members to drive new business into the company. Losing significant staff members now will potentially leave you in a less than ideal situation in years, or merely months, to come.
Preparing for the worst during periods of financial difficulty will ensure that your business is equipped for any possible problems. While your books may balance and your capital may remain strong, the state of the economy suggests that not safeguarding your business from fiscal harm is an unwise and potentially damaging business decision.
Search online with the aim of cutting the price of your business electricity and other vital resources. Make modest monetary reductions before considering extreme cutbacks as this will put you in strong standing should your business experience the typical 20 per cent dip in revenue during this recession.
If you’re a business owner or manager, what steps do you have in place to make your company resistant to recession?