- May 26, 2021
- | 129
One could argue that the financial recession challenges the management of a company, owners and general managers, to find new ways to save their business. No one can predict exactly when a financial recession will take place, for how long it will last and what effects it could have on a business. There is always an indication of what will follow tomorrow, but how prepared are we?
The challenges of COVID-19, the lack of new investment opportunities, the deficit cash flows of the tourism industry as well as limited market mobility due to liquidity shortage, are indications that financial recession is just around the corner. Taking this new reality into account, it gives us the opportunity to better prepare businesses and our workforce for economic recovery.
Obviously, there is no one-size-fits-all solution, as each business comes across different challenges and each industry is affected differently. But there are some key steps that all businesses can take to develop reliable response mechanisms, such as:
- Cash Flow Protection: Financial liquidity is the core of any business. The less money a business earns, the less it will be able to spend. This is called the Balanced Liquidity. It is much easier to control your cash outflows, since it concerns internal procedures, than to control how much money you earn. The less you spend the better. You need to prioritize your expenses by putting first those that will negatively affect the flow of the business.
- Offer as much as you can to existing customers: The key here is to provide excellent quality services and products to existing customers. Give them something that will exceed all their expectations. You need to make sure that you keep your customers happy with the services or products provided to them. This results in a stable and loyal customer relationship.
- Give your employees all the necessary information: For the majority of all companies and more specifically for companies that provide services, a good team of employees is the foundation of the business’ body. Every owner must openly and correctly inform their employees on the actions and strategies needed to be taken by the company in order to overcome the financial recession as peacefully as possible. The person responsible for the company should clearly refer to job security, setting boundaries and promoting both teamwork, as well as taking initiatives by employees. It is very important for the employees to realize that they need to keep their customers happy.
- Maintain Positive Thinking: Do not constantly think about what can go wrong, but believe in what could go right. Focus on the positive and communicate positively with your customers and employees.
- Competition – New clientele: Gaining a new clientele in a time of financial recession is much easier. You could achieve this by differing from the competition. You have to prove to the world that you are not only here providing services but also that you are better from everyone else. Customers need solutions, so all you have to do is reassure them that you are able to give them what they need. You can easily develop this through your ongoing advertising campaigns.
- Emergency Financing Plan: The possibility of having an increases the chances of success. It would be good for the business to inform the banking institution with which it cooperates and to ask for credit facilities, loans and so on. This funding should remain intact for as long as possible. It is very important that the business uses the new credit ease only in cases of emergency or to secure that the business will be able to continue operating as before.
- Going digital: As “digital everything” is the new trend, it would be ideal for a business to invest in digital marketing; that means hiring qualified individuals to perform digital marketing, conduct bank accounts, loans or come up with ideas valuable enough for crowd funding. By avoiding intermediaries in times like these could be cost efficient and less time consuming.
The most important thing for one to keep in mind is that, the better prepared we are the easier we can end up having an even more successful and strong business in the future. As in any crisis period, market changes certainly pose many risks, but they can also create new business opportunities and push businesses and industries to innovate as more people are choosing solutions that will allow them to have everything they could possibly need in the comfort of their own home. Therefore, the earlier a company detects potential threats, the better the chances of overcoming the crisis with the least possible losses, but also of being able to adapt and identify new areas for action.