How to manage your business through a recession

Nigel Botterill has built nine separate million pound businesses from scratch in the UK and is the founder of Entrepreneur’s Circle— the largest membership organisation dedicated to helping its members to grow. Here, he provides his insight into how best to navigate the coming months with key tips to help your business withstand the current economic climate.

Whether it’s predictions from the IMF or Bank of England, it seems that both a meteorological and financial winter is coming. As a business owner, how you think and what you do will determine the state in which your enterprise emerges from the expected downturn. It’s up to you to plot your way through any crisis, regardless of what happens in Westminster or Downing Street.

The actions and steps you take to ‘protect’ your business this winter will end up propelling you forward into 2023. By thinking properly, creatively — and then doing the right things – you can overcome whatever the market throws at you. To give you a bit of a steer, here are some steps you can take to prepare for the road ahead.

1. Stay calm

At times like this, it’s not necessary to follow the crowd. Even if the press are hyping up the situation or your peers are fearing the worst, keep calm and focus on practical steps. Remember:

• This will pass, this isn’t forever: the act of worrying doesn’t solve anything. Try to take the emotion out of the situation, be a positive influence, and not to overreact.
• Keep calm and take your time: rushed decisions are usually bad ones. Take the time to think about the long term impact of your actions. 

Focus on what you can control and make the best out of this situation. Take this opportunity to focus on your business and ensure you’re working with switched-on, motivated people.

2. Give yourself a clear target and goal

This is vital, even if you decide that your goal for next year is to just not lose money. The reality is, in most businesses, they’ll still, despite everything that’s happening, be able to do better than that providing they think properly and do the right things. But, in all cases, they’ll have a clear target and goal. You’ve got to have a number.

To help you, think about these two questions:

• How is my business going to survive?
• How can I add £xxxk to my sales by the end of next year?

Which of those questions do you think is going to be more helpful and constructive to you in the weeks ahead? It’s all about how you think and then what you do.

3. Invest in your business

Most importantly: don’t stop investing in the growth of your business just because the economy’s wobbling. History teaches us that this is the time when investment really pays off most. The business owners who are out there communicating with their market, attracting new customers, positioning themselves clearly and in the right way, will be the ones to prosper.

This winter, it’s likely that the majority won’t be investing. They won’t be taking any risks. They won’t be learning, growing, or thinking differently.

So think clearly and accurately. Execute well. Put in place a clear target and goal. It’s your time.

4. Don’t forget the fundamentals – manage your time and your business like a pro 

Don’t just hope for the best, but have a plan and a schedule, and stay in control. Spend 90 minutes working on your business every day, doing the important stuff, not getting dragged into the weeds and letting others suck up your time. 

Don’t tolerate behaviour from others (staff and customers!) that you shouldn’t. You always get more of what you tolerate, so have standards that you don’t allow to be breached. Don’t spend your time tackling little problems; embracing big problems is how you move the dial. 

Don’t forget to schedule thinking and rest time, so you stay at your best and most creative. Have your holidays for next year booked and in the diary already, and schedule thinking time in there too.

Understand that business is a numbers game and stay all over it. Remember that your operating cash flow is the lifeblood of your business. 

Don’t just focus on this week or this month — it’s all about paying the bills — know what your business needs to do to deliver on your terms.

Don’t forget the fundamentals of success, and commit to developing yourself and your business. This is one of the greatest steps you can take to deal with whatever carnage the Government or the markets throw at us.

You can get personal help and support to grow your business in these challenging times, for free, at www.entrepreneurscircle.org.

The views expressed here belong to the author and do not represent those of Funding Circle. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here. If you have any questions, please speak to your professional adviser or seek independent specialist advice.