Here is the summary of our 5-Step Recession Proof Programme as part of Financial Freedom for Organisations - that is F₃O: Regularly assess the health of your business; Readjust your products and services and the resources required as necessary; Build a lean, efficient team and remind them that you appreciate them; Listen to your employees’ needs, and they will give discretionary effort for you; and Never stop thinking about how you can accomplish numbers 1-4 better and more efficiently.
So here at YBP, we would like to share how you can help to recession-proof your business -
1. Assess your business’s health
In the months leading up to a recession, consumer spending and available capital can both decline, which can cause a business to feel a pinch in their budgets.
This means some difficult decisions may have to be made regarding product pricing, marketing initiatives, hiring, benefits and even new launches.
While each business will experience a recession in unique ways, the most common challenges faced by companies of all sizes include:
Temptation to cut product size, quality and benefits – or raise prices. When lagging sales no longer pay for the cost of doing business (you don’t breakeven), businesses may look to products to find wiggle room in the operating budget.
Not enough capital to pay employees. Companies may feel they can no longer pursue plans to expand operations, pay bonuses or even keep the workers they have.
Lower employee morale and productivity. Frequent layoffs and employees asked to do more with less can lead to a culture of apprehension. Productivity can suffer when employees feel uncertain and unmotivated by bad news.
Data is the best way to meet these challenges head on. It’s vital to understand what the metrics say about your day-to-day operations, even when they show that your company may be suffering.
Data on the marketplace …
Data on the numbers; your bottom line; your breakeven; your cashflow; your profit/loss …
Data on your status in the current technological; electronic; AI age …
Data on your customer experience; customer care …
Have you kept your data, or used a traffic light target system? These are suggestions we share with our clients.
Try to answer these questions:
Are there inefficiencies regarding your product or service offerings?
How much talent can we afford right now? How far can we really stretch people?
What resources do you need to maintain or exceed current output?
2. Implement change
During any analysis that we conduct, we identify the trouble areas of your business.
As a result, we suggest it’s time to make changes that will make your business more resilient in this (and every) economic climate.
What could this include –
Realigning your staff or restructuring your organisational chart
Evaluating products and services to ensure the market demands continue to be met for your clients
Readjusting benchmarks and projected growth targets.
Not every problem can be solved at once.
Prioritise issues with the highest potential and least likely to damage your customer base, business culture and bottom line.
So here are some suggested actions to take:
Can you consolidate redundancies?
Can the job of two workers be performed by one?
Is job-sharing an appropriate solution?
Could the non-essential employee be moved to an area where talent is scarce?
Providing encouragement and reassurances to your existing leaders and staff
Identifying undiscovered leaders in your organization and calling on them to step up
Actions to take:
Mentorship and training:
One of the hidden gems in any business is having a strong mentorship and training programme. If this is not currently in place, this would be a really good time to introduce one and make better use off the staff and time through difficult situations.
Rally the troops:
Explain that while these may be tough times, the tide will change.
If everyone bands together, the company will persevere.
Remind them that their hard work is valued and does not go unnoticed or unappreciated.
Ask your staff to help identify unrecognized natural leaders.
Is there someone that everyone relies on during stressful times?
Who is the ‘goto’ person who answers questions, provides guidance and acts as a peer mentor without being asked?
Once identified, encourage these high producers to take on more responsibility and fill in gaps.
Use metrics to track and recognize core competencies.
Understand who is on the bench and whether they can assume extra responsibility.
That way you can begin to cross train team members.