business economic downturns

Sadly, economic downturns have become part of our reality, especially in today’s dynamic global economy. In the USA only, there have been 11 recessions since 1948, an average of one every six years. This is without adding the time the recession lasted and how long it took for businesses to recover. 

Whether it’s a recession, financial crisis, inflation or market crash, economic downturns profoundly impact businesses of all sizes. Companies that can weather the challenges or even stay ahead of them are the ones that will be left standing once the storm passes. These companies choose a proactive approach and take necessary steps to protect their business, ensuring they mitigate the losses and even capitalise on opportunities. 

The impact of economic downturns 

We all know how damaging the recession can be. Just remember the “Great Recession” of 2008 that affected the markets globally and resulted in the loss of more than $2 trillion in economic growth. The aftermath lasted for years after the recession ended, with individuals and businesses taking a long road towards recovery. 

Economic downturns can significantly impact business markets, with hardly any industry being recession-proof. Even if the recession does not directly affect the company, it is still susceptible to its consequences. From market volatility and changes in industry trends to a decrease in customer spending, the ripple effects of the recession can damage a business that hasn’t taken preventive measures.

Recession or even just the fear of economic downturns can also result in reduced online security, especially with small or new businesses. They are already working with a lower budget, and with the pressure to save costs, they might reduce or even cut departments they determine are non-essential. Bigger businesses are also not immune to this; they could develop a false sense of security and actually downsize the teams responsible for their online safety. This gives fraudsters a better chance of exploiting unsuspecting companies, especially considering that fraud is one of the rare recession-proof industries. According to SEON, during the recession in 2009, the FBI experienced an increase of 22.3% in online crime complaints. With the 2020 recession, that number went even higher, with a 69.4% increase compared to the previous year.

What can you do to protect your business during economic downturns?

The truth is that your business doesn’t have to suffer during the recession. If you take the proper steps, you can not only survive it but also grow your business. AdRoll explained that many businesses have grown during economic downturns, from Netflix and Starbucks to Airbnb and Amazon. Start taking proactive measures instead of just reacting to the situation, and you can join the greats that came out even stronger. 

Customers should always be your priority.

Recession often results in customers tightening their belts, and you want to ensure they don’t do it with your business. Customers make or break your business, which is why 64% of Irish organisations consider customer service as their revenue generator. By constantly trying to improve the customer journey, satisfying their needs, and continuously providing the best value for their money, you will create loyal customers that will stay with you during the difficult time. Staying informed about market conditions and trends can help you make informed decisions about future projects and stay ahead of the competition. 

Create an action plan before anything happens. 

You don’t want to be caught off guard and struggle with keeping your business alive. Create a step-by-step plan for dealing with every element of your business, such as overhead costs, marketing or even employee appreciation. Developing an action plan that clarifies what can be done during the crisis or even before will minimise your stress and help you stay ahead of your competitors. Separate the plan by levels of seriousness, such as easy trimming, serious changes and drastic cuts. This allows you to make informed decisions quickly while avoiding making unnecessary mistakes due to stress and haste.

Operate within your budget.

This tip doesn’t apply only for recession times, but always. You want to avoid being settled with unnecessary debt, which puts your business in an ungrateful position, especially if something unexpected happens. Determine your budget and operate within your limitations while reducing unnecessary costs, for example, by renegotiating contracts with your suppliers or utility providers. Just be mindful not to damage your business by cutting back on departments that keep your company going, such as marketing or security. 

Diversify your offer

Try to determine the steps you can take to expand your business and attract a more diverse set of customers. From digitizing your company or building an online presence to offering new products or even just expanding on your current offer, this is essential for staying relevant in today’s busy market. If you accomplish this without making a significant investment or using existing infrastructure, you will already be ahead of your competitors.

Conclusion

Economic downturns happen more often than people think, which is why preparing your business for it is essential, especially in today’s volatile economic landscape. By taking a proactive approach, you can mitigate the losses and maybe even discover new opportunities. Through building long-lasting relationships with your customers, strategic planning, risk management and diversification, your business will be able to navigate economic downturns more effectively. The worst thing for your business would be to wait for something to happen before you react. Be prepared, be proactive and protect your business.

By Jim O Brien/CEO

CEO and expert in transport and Mobile tech. A fan 20 years, mobile consultant, Nokia Mobile expert, Former Nokia/Microsoft VIP,Multiple forum tech supporter with worldwide top ranking,Working in the background on mobile technology, Weekly radio show, Featured on the RTE consumer show, Cavan TV and on TRT WORLD. Award winning Technology reviewer and blogger. Security and logisitcs Professional.

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