It’s official. We’re in a recession. UK economic growth has been in the negative, dropping by 20.4% between April and June 2020. It’s worth remembering that most of the damage was done in April, during peak lockdown. GDP growth has been creeping up since May and if you have a look at the Okappy business activity index page it shows that work has been bouncing back.
But, in these uncertain times, there are things you can do to help your workplace get in the best possible position to ride it through. Here are our 3 steps:
1. Revise your plan
Chances are, the plan you had at the start of 2020 for your company or department has gone out of the window. In the chaos of lockdown, you may not have had a chance to properly revisit it. Have a look at some of the key targets you set at the beginning of the year and see how they can fit in now. If they’re no longer applicable, scrap them and work out what they should be for the rest of Q3 and Q4, moving into 2021.
The most important things to consider are the key risks to your area of the business. Work out whether the risk is too high for certain aspects and respond by spreading the risk. This could include taking steps to reducing debt or moving some of your business operations to a different location.
Following on from assessing risk, scenario analysis can be a helpful way to test different models to help mitigate future loss. Start by defining the objective and gathering data. Identify the key factors, trends, and uncertainties that may affect your plan when it comes to operations and finances.
It might be helpful to do a PEST analysis to help you analyse the political, economic, socio-cultural, and technological changes in your business environment. You can develop potential scenarios by separating certainties from uncertainties to understand the risks to your workplace in the short, medium and long term.
2. Finesse your finances
Having a large volume of jobs doesn’t necessarily mean your workplace will come out top – the real defining factor is cash. A review of your business finances will be a big part of recession-proofing your organisation. Take a long hard look at the state of your cash flow within your department. What you have coming in and out – and when – will have a knock on effect on whether your workplace is in a fit state to ride this out.
Work out if there are any unnecessary expenditures that your team can permanently or temporarily cut. Have a look at what sorts of clientele are bringing in cash and paying invoices on time. Can you focus efforts on helping to secure more of the same?
If you’ve done all of this, but capital is holding your department back or you’re not able to cover the costs to pay the suppliers and team – a business loan could be a backup option. For businesses affected by Covid-19, many banks are offering special rates and application criteria, so it’s worth looking around at what is on offer for your organisation. Have a look at what government support is on offer too, as there may be a particular grant or scheme that you’re eligible for that will give your workplace the boost it needs.
3. Keep connected
Staying connected with industry stakeholders is paramount for business longevity. This relies on healthy channels of communication between departments, employees, managers, customers and subcontractors.
Having one platform where communication takes place and is documented means that key details involving all aspects of the work are readily available and can be tracked if required. If your current channels of communication are fragmented and broken, it’s worth considering changing your methods. This way you will have all your information at your fingertips and your business will be ready to jump into action, instead of being caught up trying to trace what happened in the past.
Okappy can help. It saves you time, minimises mistakes, streamlines jobs and invoicing, and by integrating with Xero and other accounting packages, it offers tidy balance sheets you can show to your bank when you need a loan.
Ready to make your life easier with Okappy? Check out our free trial or request a demo to see Okappy in action!
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