Steve Muncey, senior partner for KPMG in East Anglia, discusses the challenges facing organisations across the region as the UK slowly emerges from recession

Steve Muncey, senior partner for KPMG in East Anglia, discusses the challenges facing organisations across the region as the UK slowly emerges from recession

NOW that the worst of the recession is over, and business confidence slowly returns, many businesses are able to take stock of where they are, what shape their business is in and start to give some thought as to how they can plan for growth.

With the strength of any recovery in the economy uncertain, managing this risk while keeping one eye on the future should now be part of daily business life.

Short term gains have been the rule of thumb for many but while their immediate gains are obvious, some strategies can actually prevent a business from recovering - for example, where workforces have been trimmed to the bare minimum, or there has been a complete halt in developing new products or services.

Standing still, even in a recession, should only be considered where a business is severely struggling. Progress must continue if managers are to lead their companies out of a recession in a strong position.

But if you thought the recession was bad, even greater dangers may lie ahead as the economy recovers. Overenthusiastic or unplanned expansion ahead of the upturn can prove disastrous. After all, more businesses fail on the way out of recession than on the way in.

Resizing or restructuring the business may be necessary and with a focus on medium to long term gains, managers can revisit cost cutting and efficiency programmes to ensure they add real value to a business.

As a result, mindsets must now begin to change to prepare for the long haul that lies ahead.

Maintaining a strong grip on cash, optimising costs and minimising major liabilities such as pension schemes will continue to be on the agenda for all. Without implementing the right strategies to cope sufficiently in each of these areas, businesses are unlikely to emerge from the recession unscathed.

As other countries emerge from recession before the UK, local businesses must consider these markets carefully as possible routes for growth. A failure to look at these opportunities could result in global competitors overtaking our competitive advantage.

There is no doubt that difficult times lie ahead for all businesses. For some it will be about dusting themselves down, while for others, such as companies who are suppliers to the public sector, it will be about getting ready for the impact of any future spending cuts in that sector. Either way, now is a window of opportunity to act.

Steve Muncey can be contacted via e-mail : steve.muncey@kpmg.co.uk