We’re currently learning this in extreme ways and will be better off as a result. All we have to do now is be positive. Tony Hawk, president of the Tony Hawk Foundation and founder and CEO of Birdhouse Skateboards; the most influential and commercially successful skateboarder of all time, with a net worth of $100 million.
2. Make the most of your financial resources.
Take advantage of all the services available if you’re anxious about your finances. Do your research on the CARES Act advantages that are available to you. Paying for necessities and reducing superfluous expenses should be your top goals. If you’re having difficulties paying your rent, try refinancing your mortgage or calling your landlord. If you have a lot of credit card debt, start paying it off right away, starting with the cards with the highest interest rates.
Right now, the finest investment you can make is in yourself. With unemployment at an all-time high, rebrand yourself as a more attractive job candidate.
Take online courses and gain new skills so that when we emerge from this, you may repackage yourself for a new economy. Barbara Corcoran is the founder of The Corcoran Group, the host of the “Business Unusual” podcast, and a Shark on “Shark Tank.” She can be found on Instagram and Facebook.
3. Adapt to keep your firm afloat.
Forget your plans if you want to keep your business afloat during these trying times. It’s past time to change. Consider how you can digitize your products and services; for example, you could virtualize your events or sell digital downloads instead of actual items. Use technology to automate your procedures and reduce your reliance on people.
In a crisis, cash is king, therefore keep an eye on your cash level on a daily basis. Collect from those who owe you money, renegotiate payment conditions with those who owe you money, and put a stop to unnecessary spending. Retention of existing consumers should take precedence over new business. Inquire about how you may assist them with their problems.
4. Accept the circumstance as it is.
A recession does not signal the end of the world; rather, it signals a shift in people’s wants from want-to-haves to must-haves. This recession, like previous ones, will give rise to a slew of new businesses and millionaires. You have the option of being upset, waiting it out, or relying on a government bailout or you can embrace the new normal, recognize the new opportunities, and adjust yourself properly.
With a positive attitude, problem-solving skills, and hard effort, this may be one of the most fruitful times of your career. There’s never been a better moment to start a business. People in a booming economy are swamped with marketing messages and have difficulty deciding where to spend their money.
Now that advertising is quiet (advertising is cheap), our requirements are crystal apparent. You can succeed if your company meets those demands in the same manner that Zoom, Netflix, and UberEats do. Mike Peters is an entrepreneur, philanthropist, and the founder of the Yomali group of enterprises, which has produced over $1 billion in internet sales.
5. Concentrate on resolving issues.
The way you approach each problem impacts the outcome. You will obtain a poor result if you have a bad attitude. You’re more likely to acquire what you desire if you have a positive outlook. In a recession, money does not disappear; it simply changes hands. So figure out who has money, what fresh challenges they’re dealing with, and what you can sell them to help them address those problems.
People, for example, still need to stay in shape when gyms are closed, thus online personal trainers are booming.
You must also know how to use social media and advertising to generate traffic to your website. You’ll succeed in good times and bad if you know how to acquire traffic that translates into paying customers. Connect with Bedros Keuilian, the founder of Fit Body Boot Camp, author of “Man Up,” and host of “Empire Podcast Show” on Instagram, Facebook, and YouTube.
6. Invest in yourself and advance your career.
Right now, there isn’t much “I’m afraid of missing out.” No one is getting together as often, partying as much, or brunching as much as they used to. This experience will not happen again in your lifetime, so take advantage of it.
Don’t become too comfortable. Find a new activity, read a book, enroll in an online course, and live in the now. You can do everything you set your mind to if you focus on yourself and invest in yourself. Zain Kheraj, co-founder and CFO of TrustMySystem, an analytics and sports consulting firm
7. Continue to exercise and study.
Make a plan for each day and hold yourself accountable to it. In many respects, I’ve had to pivot, but one thing that hasn’t altered is my dedication to exercise, which is essential for staying optimistic and focused. I enjoy going for a run or a walk. If you don’t, do 15 minutes of planks, jumping jacks, or core work on the floor while listening to your favorite sweat tunes.
I’ve become reliant on my electronics, like many of us, so I’m using them to educate myself. Use a motivational app or watch a motivational video, such as Glennon Doyle’s on YouTube “TEDxVasa’s “Unlocking Us with Bren Brown” or Antoni Lacinai. Take a deep breath and express your gratitude to the cosmos.
This circumstance may cause post-traumatic stress or post-traumatic growth. It’s entirely up to you. This could be the time when you need to incubate your gifts. Holly Parker, founder and CEO of Douglas Elliman’s Holly Parker Team; award-winning broker with over $8 billion in sales; follow Holly on LinkedIn and Instagram.
8. Think about the best and worst-case situations.
It’s difficult to predict what the future contains, yet difficult times can benefit those who persevere. Many of the world’s most successful companies, including Google, Apple, Microsoft, Airbnb, Disney, and many others, arose from recessions. Recessions abound with chances, but few people take advantage of them. It’s critical to acknowledge that the next decade is likely to be substantially different from the previous one. Don’t assume that assets that have done well in the past will continue to perform well in the future. Invest in gold instead of Tesla stock.
If you’re in charge of a business, make prudent judgments so that you can prosper even if things go worse.
Simultaneously, put as much money into expansion as you can. Maintain a sufficient amount of cash in your company’s bank account, and then aim for the stars. Vote for the charity Judd Rosenblatt, founder and CEO of AE Studio, an agile web development and data science consulting organization with a purpose to empower human agency through technology;
9. Continue to put in the effort.
Because the world is continually changing, you must be able to change as well. Concentrate on being innovative and adjusting to what’s going on around you. Do not cease leveling up with a sense of urgency, whether you’re learning a new talent or honing an old one.
Anything worthwhile in life requires time and effort, so you must put in the effort. Work like hell, as billionaire CEO Elon Musk puts it. Every week, put in 80 to 100 hours. This increases your chances of succeeding. Farhaz Kheraj, co-founder and CEO of TrustMySystem, an analytics and sports consulting firm
10. Do not surrender.
Keep your flexibility and willingness to pivot in mind. Those that emerge victorious from this situation will be continually moving. This entails being upfront with clients and looking for new revenue streams and methods to continue in business. Consider how you can make the most of your team. Is everyone in the correct spot?
How do you get through a downturn?
But, according to Tara Sinclair, an economics professor at George Washington University and a senior fellow at Indeed’s Hiring Lab, one of the finest investments you can make to recession-proof your life is obtaining an education. Those with a bachelor’s degree or higher have a substantially lower unemployment rate than those with a high school diploma or less during recessions.
“Education is always being emphasized by economists,” Sinclair argues. “Even if you can’t build up a financial cushion, focusing on ensuring that you have some training and abilities that are broadly applicable is quite important.”
Increase Marketing and Advertising spend
When done correctly, business executives understand that marketing and advertising bring in more customers. They also realize that during a recession, the majority of other firms, including many of their competitors, will cut marketing and advertising budgets.
As a result, astute, proactive business owners and/or management teams ramp up their marketing and advertising campaigns. That’s correct. Rather than contracting, marketing should be enhanced during a recession. Implementing a marketing plan that is more aggressive than competitors’ provides a compound positive effect and concrete outcomes. During a recession, companies that slash their marketing and advertising spending would lose even more revenue, producing a self-fulfilling prophecy of failure.
When it comes to which businesses do well during a recession, it’s those that promote themselves aggressively and engage in advertising and other forms of digital marketing.
Cut the Bottom 20% of their Worst-Performing Customer Base
While it may appear paradoxical, significant organizations use this strategy to prosper. We’ve all had clients or customers who are late to pay, difficult to deal with, or take a disproportionate amount of your staff’s time in relation to the revenue they bring in. Now is the time to eliminate these customers.
Increased marketing efforts will attract new business, which will necessitate increased internal personnel. Cutting the bottom 20% of your client base frees up resources and capabilities of your existing labor force, allowing you to avoid adding new staff to your payroll.
Improve Operating Processes and Deliver Better Services and Customer Experience
This is the ideal moment to examine your processes from a quality control perspective, brainstorm with your employees, and figure out how you can better serve your clients. You must stand out from the crowd, and if you provide subpar service, potential clients will look elsewhere. At this vital juncture, this should not even be a possibility. You’ll get even more consumer loyalty if you provide better customer service.
Look for ways to optimize and streamline your business operations so that your staff can work more efficiently. This will assure your success in the following crucial step:
Service More Customers with the Same or Even Fewer Resources than You Are Allocating Now
You will now have the resources needed to support the increased number of consumers achieved by following the preceding steps, thanks to the enhancement and improvement of your operating procedures.
Fire Your Worst Employees, while Assuring the Rest of Your Staff that You Are Committed to them and their Well-Being.
We’ve all had employees that didn’t deliver what was expected of them. Perhaps they only put in 50% of their effort, or they are a toxic person that destroys your team’s unity. We do not always fire these employees because they perform a critical service for the organization, and we believe that keeping them on staff, even at a cost, is easier than training a new employee or eliminating the position entirely.
Whatever the situation may be, now is the moment to act. It’s essential for your company’s success. It’s crucial for your team. It is required by your customers and clients. During a recession, there is no tolerance for self-defeating behavior. Consider the larger talent pool that a recession affords if you are able to fill the position with someone new. You don’t have to be stuck.
Good employees, on the other hand, are priceless, which is why you should reassure your core team that you will support them during the crisis. That the company can go into the red this year if necessary to keep the team together (and preferably every corporation has reserves or a line of credit to do so).
If you fire a good employee, your entire team’s morale will suffer because each employee would wonder, “Am I next?” Fear, understandably, lowers productivity. Assure your team’s good people that you’ve got their backs. They will have yours if you do so.
- To strengthen brand loyalty and expand the client base, improve the customer experience.
- Improve your operations processes to increase efficiency, which will allow your staff to better serve the needs of your growing customer base.
- Remove underperforming employees to free up capital for high-performing employees and the resources needed to meet increased demand. And assure your key staff that you have their back. This assures that they will put in the same amount of effort for you and the company.
Did we ever imagine that the globe would be hit by a global epidemic like the one we’re seeing today at the start of 2020? No. However, recessions and severe economic downturns have occurred in the past, and some enterprises have thrived in the face of adversity.
It does not require inexhaustible financial resources. All it takes is the right plan, an offensive posture, and a growth attitude.
Remember that throughout this recession, people all over the world, including your consumer or client base, rely on you to provide them with the goods and services they require. Make yourself available to them. Let them know you’re still around, and that you’ve improved your products, services, and customer service. In the same way, we are here for our clients and team members.
During a recession, who benefits?
Question from the audience: Identify and explain economic variables that may be positively affected by the economic slowdown.
A recession is a time in which the economy grows at a negative rate. It’s a time of rising unemployment, lower salaries, and increased government debt. It usually results in financial costs.
- Companies that provide low-cost entertainment. Bookmakers and publicans are thought to do well during a recession because individuals want to ‘drink their sorrows away’ with little bets and becoming intoxicated. (However, research suggest that life expectancy increases during recessions, contradicting this old wives tale.) Demand for online-streaming and online entertainment is projected to increase during the 2020 Coronavirus recession.
- Companies that are suffering with bankruptcies and income loss. Pawnbrokers and companies that sell pay day loans, for example people in need of money turn to loan sharks.
- Companies that sell substandard goods. (items whose demand increases as income decreases) e.g. value goods, second-hand retailers, etc. Some businesses, such as supermarkets, will be unaffected by the recession. People will reduce their spending on luxuries, but not on food.
- Longer-term efficiency gains Some economists suggest that a recession can help the economy become more productive in the long run. A recession is a shock, and inefficient businesses may go out of business, but it also allows for the emergence of new businesses. It’s what Joseph Schumpeter dubbed “creative destruction” the idea that when some enterprises fail, new inventive businesses can emerge and develop.
- It’s worth noting that in a downturn, solid, efficient businesses can be put out of business due to cash difficulties and a temporary decline in revenue. It is not true that all businesses that close down are inefficient. Furthermore, the loss of enterprises entails the loss of experience and knowledge.
- Falling asset values can make purchasing a home more affordable. For first-time purchasers, this is a good option. It has the potential to aid in the reduction of wealth disparities.
- It is possible that one’s life expectancy will increase. According to studies from the Great Depression, life expectancy increased in areas where unemployment increased. This may seem counterintuitive, but the idea is that unemployed people will spend less money on alcohol and drugs, resulting in improved health. They may do fewer car trips and hence have a lower risk of being involved in fatal car accidents. NPR
The rate of inflation tends to reduce during a recession. Because unemployment rises, wage inflation is moderated. Firms also respond to decreased demand by lowering prices.
Those on fixed incomes or who have cash savings may profit from the decrease in inflation. It may also aid in the reduction of long-term inflationary pressures. For example, the 1980/81 recession helped to bring inflation down from 1970s highs.
After the Lawson boom and double-digit inflation, the 1991 Recession struck.
Efficiency increase?
It has been suggested that a recession encourages businesses to become more efficient or go out of business. A recession might hasten the ‘creative destruction’ process. Where inefficient businesses fail, efficient businesses thrive.
Covid Recession 2020
The Covid-19 epidemic was to blame for the terrible recession of 2020. Some industries were particularly heavily damaged by the recession (leisure, travel, tourism, bingo halls). However, several businesses benefited greatly from the Covid-recession. We shifted to online delivery when consumers stopped going to the high street and shopping malls. Online behemoths like Amazon saw a big boost in sales. For example, Amazon’s market capitalisation increased by $570 billion in the first seven months of 2020, owing to strong sales growth (Forbes).
Profitability hasn’t kept pace with Amazon’s surge in sales. Because necessities like toilet paper have a low profit margin, profit growth has been restrained. Amazon has taken the uncommon step of reducing demand at times. They also experienced additional costs as a result of Covid, such as paying for overtime and dealing with Covid outbreaks in their warehouses. However, due to increased demand for online streaming, Amazon saw fast development in its cloud computing networks. These are the more profitable areas of the business.
Apple, Google, and Facebook all had significant revenue and profit growth during an era when companies with a strong online presence benefited.
The current recession is unique in that there are more huge winners and losers than ever before. It all depends on how the virus’s dynamics effect the firm as well as aggregate demand.
Is it beneficial to have cash during a downturn?
- You have a sizable emergency fund. Always try to save enough money to cover three to six months’ worth of living expenditures, with the latter end of that range being preferable. If you happen to be there and have any spare cash, feel free to invest it. If not, make sure to set aside money for an emergency fund first.
- You intend to leave your portfolio alone for at least seven years. It’s not for the faint of heart to invest during a downturn. You might think you’re getting a good deal when you buy, only to see your portfolio value drop a few days later. Taking a long-term strategy to investing is the greatest way to avoid losses and come out ahead during a recession. Allow at least seven years for your money to grow.
- You’re not going to monitor your portfolio on a regular basis. When the economy is terrible and the stock market is volatile, you may feel compelled to check your brokerage account every day to see how your portfolio is doing. But you can’t do that if you’re planning to invest during a recession. The more you monitor your investments, the more likely you are to become concerned. When you’re panicked, you’re more likely to make hasty decisions, such as dumping underperforming investments, which forces you to lock in losses.
Investing during a recession can be a terrific idea but only if you’re in a solid enough financial situation and have the correct attitude and approach. You should never put your short-term financial security at risk for the sake of long-term prosperity. It’s important to remember that if you’re in a financial bind, there’s no guilt in passing up opportunities. Instead, concentrate on paying your bills and maintaining your physical and mental well-being. You can always increase your investments later in life, if your career is more stable, your earnings are consistent, and your mind is at ease in general.
What things sell well during a downturn?
When it comes to some types of items, it doesn’t matter how the economy is going. Even in difficult circumstances, people will require “essential” products. Selling these things at a reasonable price will not necessarily increase your profits, but it will help you maintain regular client traffic and increase the likelihood that consumers will be enticed to buy more expensive items, allowing you to cross-sell more profitable items.
Everyone has to eat, and selling food can be a wonderful way to diversify your product options during a slump. Pre-packaged foods, such as chips and cookies, are shelf-stable, allowing you to keep your stock from spoiling while you raise consumer knowledge of your increased offers.
Toothpaste, deodorant, shampoo, toilet paper, and other grooming and personal hygiene products are always in high demand. Offering these goods can position your company as a valuable resource for customers during difficult times.
Even in difficult times, people want to look well. They may not be able to buy a new wardrobe or pair of shoes, but they can generally get a makeover or try on a new nail color. Businesses that provide these products and services are more likely to survive economic downturns.
Pets are considered members of the family and are treated as such. Even in difficult times, people continue to spend money on their dogs, including supplies, medical treatments, and grooming.
During recessions, people continue to dress. Clothing, undergarments, socks, and shoes all need to be replaced. If your company sells essential apparel, it will most likely be able to weather the storm.
Even during recessions, people continue to have children, and children are parents’ top priority. They’ll continue to spend money on clothes, diapers, formula, pediatric care, and child care services.
What commodities perform well during a downturn?
- While some industries are more vulnerable to economic fluctuations, others tend to do well during downturns.
- However, no organization or industry is immune to a recession or economic downturn.
- During the COVID-19 epidemic, the consumer goods and alcoholic beverage sectors functioned admirably.
- During recessions and other calamities, such as a pandemic, consumer basics such as toothpaste, soap, and shampoo have consistent demand.
- Because their fundamental products are cheaper, discount businesses do exceptionally well during recessions.
Do things get less expensive during a recession?
Lower aggregate demand during a recession means that businesses reduce production and sell fewer units. Wages account for the majority of most businesses’ costs, accounting for over 70% of total expenses.
In a downturn, who wins?
Another dreadful and far-reaching result of the crisis is the widening of mortality gaps. Because of unequal access to health care, health care inequities, and unequal access to healthy living locations with fresh air, fresh food, and walkable places, longevity disparity was already developing before the epidemic. Due to the virus’s influence on people with diabetes and other co-morbidities, those most at danger of dying young are also those most badly affected by the recession.
Those who keep their jobs and hours, can work from home, and those with surplus cash and wealth can buy what owners in need of cash sell: lower-priced small businesses, lower-priced stocks and bonds, and possibly even a lower-priced house or two, are the winners in every recession. More wealth, income, and health inequity will result from the COVID-19 recession.
Why did money become scarce during the Great Depression?
During the Great Depression, the money stock decreased mostly due to banking panics. Depositors’ faith that they will be able to access their cash in banks whenever they need them is crucial to banking systems.