Are we headed into a recession or not ? Perhaps we are already there ? Experts are decidedly split on this one, yet multiple credible sources are of the opinion that indeed the signs of a looming global recession are evident.
A recession is typically a period of weak or negative economic growth accompanied by a significant rise in unemployment. A quick on-line search will give you data-backed evidence that we are not only headed into a recession but further, some parts of the World are clearly already in it
Recessions take hold when there is excessive supply of goods and services that aren't consumed.
Companies respond to this situation by producing less goods and downsizing staff, subsequently people lose purchasing power and consumption continues to fall. This creates a seemingly never-ending vicious cycle.
Of course a recession can also be wind-assisted by debilitating global events - and the ones which come quickest to my mind are a post-COVID impact and the Russia/ Ukraine war, which in of themselves have resulted in something which is also a component of a recession: global inflation.
So, the bad news about a full on global recession is we can expect a high unemployment rate and a decline in wages over the next year and a half or so.
But....the good news is that if one is forewarned (as you are getting now by reading this article), one can plan and manage how they get through this period for their families, business and self.
All in all, remember that RECESSIONS =opportunities for RE-INVENTION
The golden rule to manage through any crisis is always: GET BACK TO THE BASICS
Here are 10 BASICS you can get back to, as we brace for the uncertain times ahead.
I have not gotten into too much detail for the money items since money is relative.
EXPENSES : Separate business expenditure and personal expenditure
INVESTMENTS : Avoid high risk investments, focus on low risk investments
ENTREPRENEURSHIP : Double down on your side hustle and invest in a high-income skill
CUSTOMERS : Business people, ensure you have a solid customer retention strategy for existing customers
CASHFLOW : Focus on business activities that even though they may not bring relatively high revenue, have consistent cashflow. Do not focus on big projects at the detriment of steady projects.
LIFESTYLE : Practice living frugally not only at home but in the office too. Save on water, electricity, paper and stationery by only using items as an absolute must and even then, economically.
MESSAGING : If you're an entrepreneur, now is the time to adjust your messages, product offer, brand and delivery to reflect a sense of hope, support, presence and dependability - that the market will be craving for. Times are changing, your clients will expect a commensurate change in your business outlook.
COMMUNITY : Participate in communities - look around for positive minded people who share common interests with you whether personal or business, and exchange ideas. Do not get into a a space of self-isolation. Talking together with like minded individuals can be revelatory in terms of areas you can be of help to others whilst also shedding light on opportunities around you that you were initially unaware off.
AUTOMATION : Look for ways to save on operational business costs - what mobile applications, page subscriptions and automated software can you adopt so that you work better and spend relatively less? Take at least 2-3 hours in a week researching on the readily available online tech that can work for your business. This is just a Google-click away.
COSTS : Make cost-cutting at home and in the business a top priority:
Have a budget for all expenditure
Avoid debt as much as possible or all together
Do not take unnecessary loans - bank or otherwise
Cut down on the usual luxuries or scrap them all together
Direct money to your emergency fund and ensure it is well monied
Avoid communal activities that are an unnecessary drain on your budget
Discuss with your spouse and family on all ways you can cut down on costs
Recessions are opportunities for Re-invention and the golden rule to manage through any crisis is always: GET BACK TO THE BASICS
Do you require expert support in developing a Strategy for your business in just 5 weeks or looking for a reliable business mentor to walk the journey with you ? Get in touch HERE
Jan Okonji is an entrepreneur, speaker, coach, and Founder of the Pan-African accelerator BGS – Business Growth Solutions.
He is passionate about helping employees transition safely into entrepreneurship whilst turning their great ideas into profitable businesses and has helped entrepreneurs collectively grow their revenue to over $ 10 Million in the course of running BGS.