How to survive a recession?

With an economic crisis in full swing, political u-turns on taxation, uncertainty in the markets, typical fixed-rate mortgage deals now at their most expensive for 14 years, not to mention the war in Ukraine, it’s no wonder the business world is on edge. Many are predicting that a recession is inevitable. In this economic climate, how do businesses keep their heads up and how can they keep moving forwards?

Unsurprisingly, there isn’t just one answer, but one thing is for sure: if you can maintain a positive outlook, even at the trickiest of times you will stand a better chance of weathering the storm. Look for opportunities, rather than bemoan disasters. This will probably be the single most effective thing you can do to survive, as fear of risk will hold you back probably more than anything else in bad times, as well as good.

Furthermore, positivity is contagious — staff will sense it, they will be motivated by it and they are probably more likely not only to stick with you through the hard times but to be more productive as well. So, here is our five-point survival plan for the months and (potentially) years to come:

1. Be resilient and recognise that recessions don’t last forever. In fact, on average they last around 11 months. Yes, uncertainty makes it difficult to plan for the future, but instead of trying to control the things that are out of your hands, concentrate on the things you can control. Do your research. Understand your clients’ worlds and how your products fit into them, in good times and bad. Understand your own situation. Look at your payment terms to make sure you stay out of the red. If you’re cash rich, be flexible so that payment terms don’t become a barrier for clients. Remember that cash is not the only currency. You can always take payment in products and services if that’s of value to you.
2. Be agile and flexible. Know that timing is your friend. Moments of crisis tend to accelerate trends. Recognise that your clients will also be trying to adapt and be agile, which could mean that they need less time to make decisions. If what you’re selling helps clients to tackle difficult challenges, don’t hesitate, make your move straight away. Being flexible means examining areas of business that you haven’t considered before. Think creatively about how you can expand in different directions and venture into untried waters. Look for new opportunities and new angles for your skills. Having a deeper understanding of your situation and that of your clients will help you look at the world in a slightly different way.
3. Remember communication is everything. Keep talking — to clients, to shareholders, to employees. Have empathy. Understand what’s difficult for everyone and find ways to make it easier for them to continue to work with you. When a client shares a problem with you, recognise that it’s a positive thing, a show of trust in uncertain times. That trust won’t be lost if you don’t have an immediate solution. If you did, it would probably feel out of place in any case.
4. Don’t be held back by the availability bias — that human tendency to think that the things that come to mind readily (interest rates, financial uncertainty etc) are more representative of what’s going on in the world than they really are. It’s a phenomenon that both hampers critical thinking and leads to bad decision-making. Breaking out of a negative cycle of bad news can be tricky and it might take the intervention of someone outside your company (a mentor for example) to help you see your situation more clearly.
5. Have belief. At a time of crisis, it’s more important than ever for all generations to have belief in the company for which they are working. Make sure the work environment motivates your employees so that they want to come to work. Remind salespeople that they are just as creative in their own way as your so-called ‘creatives’. Working in sales requires many skills, not least problem-solving, creative thinking and relationship-building. Ideally, you want to create a culture that makes people want to stay, and that makes them passionate about work. Belief and purpose is central to this — even in a recession.

The bottom line is, there’s no shortcut to surviving a recession. Difficult waters lay ahead, at least in the short term, whatever Rishi Sunak and others in government would like us to believe. The concept of ‘growth, growth, growth’ might have become a bit of a cliché in recent days, but even in the toughest of times, it’s true that growth is still possible. Staying positive may seem like a herculean task, but just as Hercules himself was famous for his superhuman strength, we too must stay strong and look for the opportunities that will help us not just to survive, but come out of this recession even stronger and even more profitable.