Flex, focus and finance – the way to survive the recession ahead
- Credit: PA
Stephanie Hammond, director at Beatons Group, explores the impact of Covid-19 on the nation’s economy and what it will mean to businesses here in the East.
This year has been like no other – with the worldwide pandemic bringing economic turmoil to almost every country across the globe.
In normal times, a country’s economy grows. Its people get richer as the value of the goods and services it produces increases.
When it falls, this is called a recession – and this characterised the first two quarters of 2020.
But since then, we have seen a bit of a bounce-back. So much so that we are no longer deemed to be in this recession.
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But how is this so?
Well sadly, what we experienced between July and September was a bit of a false boom.
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What the figures actually captured was an economy shutting down and reopening again.
And October saw us all pushed back to square one again.
So where do we stand now?
In November, chancellor Rishi Sunak said the economic emergency caused by the pandemic had “only just begun”, adding that the number of unemployed people across the UK is expected to reach 2.6 million by summer next year.
We already know that in the UK, there has been a significant increase in the unemployment rate – with the latest figures showing there are 300,000 more unemployed people than last year in the UK – a total of 1.62million people out of work.
In the East of England, latest figures from the Office of National Statistics reveal between July and September there were 137,000 people unemployed, 4.3% of the population.
So, what can businesses do now to protect themselves for the months ahead?
Businesses that are managing the upheaval here in the East are those who have adapted or developed innovative ways of working.
Among these is The Riverside in Woodbridge, owned by Stuart Saunders.
He had to make the difficult decision to put staff on furlough when the first lockdown struck, but saw the business rebound when it reopened by simplifying the menu and changing opening hours.
He said: “It is about thinking outside the box and making the most of what you have. The cinema side of the business has been hit quite hard but on the food side, we have actually seen an increase in income as people are screaming to go out.”
The hospitality sector has undoubtedly been one of the hardest hit by the pandemic.
But other businesses have also felt the pressure – and they too have had to adapt.
David Halliday, group chief executive of Seafast, said his company, in the logistics sector, had managed to overcome challenges by focusing on its robust business model.
“There was a relatively short period of eight weeks where we suffered a sharp drop in average weekly sales,” he said.
“But for the latest period of 18 weeks we have actually seen a strong rebound with almost a 90 percent increase on that eight-week period where we experienced a decline.
“A lot of that is down to the robustness of Seafast’s business model.
“We are not competing on price but on capability to deliver, to remote, difficult to serve, and emerging markets, coupled with our global focus upon frozen product shipping and handling. In other words, we are customer-focused.”
Both the Riverside and Seafast are among many businesses that have taken advantage of the financial help that has been available to them in the last nine months and as an accountancy firm we would urge all companies to continue to do this.
After all, as the situation shows signs of improving, government support will be withdrawn so now is the moment to take advantage.
Businesses that survive will begin to re-establish revenues and repair their balance sheets after the worst is over, but they then will have to deal with the longer running effects of this disruption.
To do this look at a flex, focus and finance plan.
You can flex by changing the way you work, adapting your service or product or trying new channels to market it.
You can focus by creating a business plan and strategy for how you will manage worst case and best-case scenarios.
And you can look at your finances in terms of cash flow and internal or external sources.
Surviving a recession can be tough for any business but there are steps you can take during a downturn to help future-proof yourself.
With the news that COVID-19 vaccines are soon to be administered in the UK, there appears to be light at the end of the tunnel.
And meanwhile, we are there to help you balance your outgoings with your income.
For more information call Beatons on 01473 659777 or email info@ beatons.co.uk.