At a recent presentation given by the Bank of England the statistics on the current recession were starkly evident. The speed, depth and rate of descent of the economy post 2008 are greater than anything we have ever known. So far the signs are that recovery is slower than anything we have known since the great depression of 1929.
Frighteningly one of the most obvious set of figures we were shown relates to the decline of lending to UK households and businesses since a peak in 2008, proving that the sources of credit available to businesses today are very difficult to come by, if they exist at all.
So what can we do about it? Well for many start up and young companies, credit was never a readily available option, so we need to look at them to learn the skills and thoughts that can help us to prosper despite the climate in the world at large.
We need to manage our cash and our profit even more diligently than ever before. We need to know those numbers, to understand the difference between cash and profit, to understand the ebb and flow of both.
We need to understand how to optimise the balances between price, profit, cashflow, margin and volume.
We need to find ever better ways of optimising the margin, retaining our clients and selling to them time and again.
The chances are that whatever we were doing before the recession hit will not work now. Too many things have changed. A little like the driver of a family saloon that suddenly finds himself behind the wheel of a supercar. Things look familiar but everything is so much more critical, so much more responsive; So potentially fatal.
This is not a time for amateurs or enthusiasts. This is a time for cool heads and skilful execution. It is a time when the word maximisation gives way to optimisation, when careering headlong has to give way to balanced progress, when the decisions we make will come under the full scrutiny of the most testing of times. But as the old English proverb states “a smooth sea never made a skilled mariner”
There will be many who can seize the many opportunities that are presented, to build their businesses, to hone their skills, to emerge from this cauldron, with strong, fit, lean businesses that are ideally suited to today’s conditions. The question is will yours be one of them.
I will be leading a free seminar on Monday 20th June where I will be discussing the top 5 things we must do to build resilience to recession. Please visit the events page on the website for details and call to reserve a place on 0845 430 9224