During tough times, the focus for every business is to think of ways how to recover. So far, 2020 could be related to a fall for businesses and individuals. Therefore, actions need to be taken; here are some ways of business development.
Before going to the solutions, the definition of recession needs to be clarified. The definition by Ben King, BBC explains the term recession in a simple way.
‘’What is a recession?
In normal times, a country’s economy grows.
Its citizens, on average, get slightly richer as the value of the goods and services it produces – it’s Gross Domestic Product (GDP) – increases.
But sometimes the value of goods and services produced falls.
A recession is usually defined as when this happens for two three-month periods – or quarters – in a row.
If a recession carries on for a long time or is particularly bad, it is known as a depression.’’
Solutions for recovery
First and foremost, it is essential that every business is prepared financially for an eventual crisis. During a recession, the process might be tough, and reducing costs might be the first solution that needs to be considered. Businesses with high debts are of a higher risk of collapse, so in the event of a recession, the first action needs to be controlling the debts. Furthermore, strict recovery plan for balancing money in and out is essential for survival.
In the time of unpredictable events, the decision-making process has to be a priority. Not only does the business need a quick response to the events, but it also needs decisive management. It is commonly accepted that this is also relevant in the everyday life of a business, but during a recession, the focus needs to be higher than ever. Many types of research illustrate the consequences if a company delays with its response or a decision. Thus, the impact of slow decision making is always contributing to negative outcomes. In order, to speed the process of decision making, a business needs a strategy for handling such situations.
It is strange to suggest technology while at the same time, reducing costs is on the day list. However, an investment in technology can help the business thrives and could be beneficial for the recovery after a recession. Research by NBER (National Bureau of Economic Research) highlights the changes in the job market, after the recession in 2008, are noticeable. Demand for people with technical skills is one of the characters of the changes. Thus, the required skills of the employers illustrate the focus of the business.
Creativity together with technology might contribute to good business practices. Firstly, when a company is at risk, one of the solutions is thinking out of the box. Why is this important? During changes in the market landscape, it has been noticed that one of the most creative campaigns are created. The reason for this is that during a crisis, fresh and creative ideas are more acceptable than in normal times.
‘’When it comes to recessions, sometimes the best definitions are the light-hearted ones. “If your neighbor gets laid off, it’s a recession. If you get laid off, it’s a depression,” as one author jokingly put it.’’