It’s that time in the business life-cycle that comes around every eight or nine years, usually following a period of sustained economic growth. The watchdogs and self-appointed proponents of doom and gloom are beginning to crow their shrill warnings of a pending economic calamity. Even though the U.S. economy is growing at respectable rate, 75% of ultra-high net worth investors are predicting that we will experience a recession in 2020, according to a recent J.P. Morgan survey. Earlier this year when Bill Gates was asked if he believed we were about to experience a financial crisis like the one in 2008, he said, “Yes. It is hard to say when but this is a certainty.”
His answer is consistent with all the others who find themselves in the business of predicting the economic future. In life all things are inevitable and recessions are as inevitable to economic life-cycles as death is to the cycle of life. It is one of those opportunities where, given enough time, you cannot be wrong. As usual not all the money experts are in agreement.
Anthony Collard, head of J. P. Morgan U.K. and Nordic investments, said, “Until we see clear imbalances building, and policy approaching a point where it really constrains economic activity, we lean towards a view that the cycle will continue to expand.” Saker Nusseibeh, chief executive at Hermes Investment Management is in agreement. “We do not see any indications of the U.S. economy entering anything like a possible recession. What we do see is clear indication of a stronger-than-anticipated U.S. economy.” Business leaders both large and small are well aware of how the health of their businesses can change rapidly due to fluctuations in the overall economy. Both predictions have critical implications for managing a business’s finances.
Having a strategic plan in place to deal with economic fluctuations is important for businesses in order to maintain and sustain long-term growth throughout the business life-cycles. While the alarms of pending downturns often insinuate decline in growth, many smart and prepared leaders of industry will navigate the dangers of economic recession successfully and some will even prosper. Sustaining business growth requires a strategy to retain and expand the customer base, improve upon best business practices and establish reasonable and measurable performance metrics that expand opportunities while limiting risk.
Making customers a priority, providing customers with quality service and products they desire is a marketing strategy that will lead to customer retention, particularly in a shrinking economy that motivates consumers to be more deliberate in making their purchase decisions. It’s increasingly important to develop strategies to measure the effectiveness of marketing activities and focus efforts on those campaigns that deliver.
Managing the quality and productivity of staff to produce cost savings without negatively impacting morale and effectiveness will preserve constrained budgets. Achieving more with less and cross-training employees to perform multiple organizational functions will keep structured costs in line with the current business reality and may produce significant growth opportunities for employees and the business when the economy emerges from the recession.
For more on how you can develop a strategy to emerge stronger and more competitive from the other side of recession, contact Junction Creative Solutions (Junction) at 678-686-1125.