As the effects of the coronavirus pandemic continue to unfold, fears of an economic recession loom. March 2020 saw the largest global economic downturn ever and, only a month later, the UK’s GDP dropped by a staggering 20.4%. While a few economists remain cautiously optimistic about the country’s recovery, others are readying themselves for a substantial post-pandemic recession that will threaten many businesses.
Rishi Sunak’s furlough scheme has been extended, which has been welcomed by employers and employees alike, however, as customers remain cautious to return to the high street and restrictions on social distance remain, the ability for businesses to fully recover may remain hindered even after lockdown has ended.
The uncertainty is causing many businesses to fret. There is a risk ahead that, without preparation, may become a reality. So, to ensure you do everything you can to prepare your business, here are the best pieces of advice gathered from across the UK’s business sector.
Don’t Aimlessly Cut
Scaling back your outgoings is a logical first step for businesses looking to weather tougher financial environments. However, without due consideration, cutting excess spending can be problematic. At times of increased competition between businesses, dropping advertising budgets can put you at a disadvantage in the long run, especially as customers become fewer.
Instead of cutting costs broadly, take time to build a plan and prioritise the areas that will keep your business afloat in a market where other your close competitors will look to overtake you. Certain expenditure, such as marketing, may be advantageous.
As uncertainty becomes prevalent, taking risks becomes even more difficult to justify. Instigating new risks can easily be avoided, however, now is also a good time to review your current strategies and minimise your business’ overall risk too.
Departments that are particularly prone to risk, such as payroll, should be reviewed or outsourced to minimise their potential pitfalls. Outsourcing your payroll to one of the UK’s leading companies, such as People Group Services, ensures that you and your employees remain compliant to tax law while preventing any financial mistakes an internal department may make, both of which could lead to financial repercussions.
Find Your Platform
The way businesses communicate with customers has changed dramatically in recent years. Social media has now taken precedence over many old forms of communication and, as customers begin to scrutinise their own spending habits and the businesses they support, it is fundamental that you voice your business honestly and clearly via an online platform.
Even small details, such as changing opening hours or responding to questions, can be dealt with quickly online and effortlessly build up your reputation.
Eliminate Debts and Improve Credit
A difficult financial climate means your business will be tested. Any unresolved debts will pose a greater risk, potentially accumulating as most costs are incurred, and your credit score will be vital should you need to borrow money in the near future.
Concentrating on these now will pay off later down the line.
Protect Your Customers
Your current customers should not be underestimated. High-quality customer service, coupled with offers dedicated to loyal and long-standing customers are invaluable to building long-term support, one that can help through a recession.
Take the time to address your customers and remind them that their support is valued.