Slapping economic downturn in the face

This week the Mettryx team are giving thought to “recession” But not in a doom-and-gloom way.

No, we’re thinking more practically Let’s be honest, it looks like tough times are on the horizon, so what can businesses do to prepare?

This week, five insights into tackling potential economic downturn head on…

Invest time to know the numbers
• Being all over the facts and figures is key to making proactive and timely business decisions

• Measures and trends drive understanding of the correlation of inputs and outputs within the business and the levers that can control and influence direction

Invest in Finance resources
• Develop financial infrastructure and understanding – whether it’s people, skills or tools

• Businesses that have historically invested in Finance prior to down-turns have fared better during, recovered faster and grown more strongly than their less proactive peers

• Establish clear decision making frameworks for all areas of the business – but particularly pricing

• Undoubtedly, business costs are already rising and that looks likely to continue

• Don’t be on the back foot reacting slowly and sacrificing profit

• Being structured about the decision to increase prices makes it easier to explain and to defend to customers

• Be specific about the reasons and clear in any communication

• Sounds obvious but it’s good practise to review costs in any economy

• Start with the largest, and those most prone to volatility

• Give thought to all costs – even those that have been recently reviewed. The economy is moving quickly so don’t overlook anything

• Supplier loyalty can yield strong strategic relationships – but can lead to uncompetitive pricing, so be mindful of market rates

• Remember though – price is what we pay, value is what we get. Don’t sacrifice the quality of product/service, losing custom is usually a far bigger cost to incur

• Few businesses perform effective reforecasting following their annual budget

• Even fewer invest in powerful “what-if” scenario planning

• Economic instability increases the likelihood of strategically significant events such as the failure of a major customer or supplier

• Just going through the process helps to prepare business leadership for potential change and sharpen the focus on how the business can adapt accordingly

• Okay, so recession might not happen but to fail to prepare is preparing to fail right?

• None of these insights will be wasted effort. The business will be leaner, more effective and ready to take on whatever the next quarter/year holds

• Don’t wait until the Bank of England or the media decide to make it formal. Doing so can often be the biggest cost a business will incur!