[09.08.22]

Last week the Bank of England warned that the UK will fall into recession, as it raised interest rates by the most in 27 years.  The Bank stated that the economy is forecast to shrink in the last three months of this year and keep shrinking until the end of 2023.

With a possible recession looming, how can businesses prepare now to minimise the impact of a recession – we would sum it up as ‘doing the things that you should be doing anyway’:

1. Manage your cashflow – 50,000 UK businesses fail each year because of cash-flow problems. Recession-proof your cash flow by examining your outgoings. Are some expenses higher than they need to be? Is your bookkeeping fit for purpose?  If you have any queries around your bookkeeping or your accounts please contact either Jackie or Andrew.

2. Retain your existing customers – it costs five times as much to secure a new customer as it does to retain an existing one. So nurture your customers, make them feel valued and communicate with them regularly.  Customers don’t stop spending in a recession, but they do spend differently. Can you create lower priced lines, or include value options?

3. Continue your marketing – when money is tight, reducing your marketing can seem an easy way of reducing costs, but continuing to market during difficult periods will help maintain your market share now and help you grow quickly as the good times reappear.

4. Look after your employees – good employees are your biggest asset, seek to retain them, focusing on their wellbeing and prioritising learning and development, so you are ready for when the economy recovers.

Castletons Accountants