SURVIVING AN ECONOMIC DOWNTURN

SURVIVING AN ECONOMIC DOWNTURN

An economic downturn is a general slowdown in economic activity over a sustained period of time. It can happen in a specific region (e.g. the Asian financial crisis in the late 1990s) or on a global scale (e.g. the global financial crisis in the late 2000s). The main features of an economic downturn include rising unemployment, falling share and house prices, low consumer confidence and declining investment.

Although one may not be able to completely protect one’s business from an economic downturn, understanding how it could affect them will help them develop plans to minimize its impact. They may also be able to identify new business opportunities.

Planning, reviewing and monitoring one’s business should give one the information one needs to make changes to help one stay financially viable. This should make it easier for one’s business to respond to, and recover from, an economic downturn. This can be done through:

Assessing business performance
Assessing your business performance should be an ongoing process. It helps you identify areas that need to be improved before they become major issues, as well as giving you the opportunity to consider how to respond.

Reviewing business plans
The first step of assessing your business performance is to review your business plan,
including financial statements, to understand what is happening within your business. Reviewing and updating your business plan will help you respond to the risks of an economic downturn.

Redoing/reviewing SWOT 
A SWOT analysis will help you identify areas that need to be improved in order for you
to respond to an economic downturn. It also gives you the ability to identify new
opportunities the economic downturn may present.

Financial analysis
Best practice financial management involves planning and forecasting financials based on the strategic goals of your business, and regularly reviewing actual performance against your forecasts. To conduct a financial analysis of your business, you need to analyze your current financial statements, including profit and loss and cash flow. Look for trends, such as declining sales, that may put your business at risk, and think about the impact they could have on your business's financial performance.

STRATEGIC FOCUZ CONSULTING | SURVIVING ECONOMIC DOWNTURN | 10th January 2017

strategicfocuz@gmail.com | Whatsapp 6018-3155357 | Contact 6010 - 3434216