We are in a global recession according to global experts in a recent Forbes article. Don’t let this be your Kobayashi Maru – No Win Scenario. Every dollar not spent by consumers reduces downstream spending by 43% according to the current velocity of money statistics. No matter what business you are in, you are being impacted by this atypical recession, one that will likely rival the tech bubble of 2001 and the financial collapse of 2008. If you don’t agree, no need to read further, but can you really take that risk?
Business models are changing on a dime. Unprecedented collaboration by major companies, FDA approval of a test in 96 hours, Universities shutting down, conventions being cancelled, large meetings going on-line in days are just a few examples. The cancellation of all NCAA spring sports and the granting of an additional year of eligibility will cause high school athletes to rethink the schools they go to.
The next six to twelve months are going to be difficult for all businesses, especially those who don’t have sound financial footing. For some companies, this will create an unprecedented opportunity for acquisition and rethinking their business models.
I know everyone has been focused on their corporate response to COVID-19 in an effort to keep their customers and employees safe. I hope your business has a plan. If not, you need to get one now.
Once the plan is in place, the next step is to focus on how to rethink your business over the balance of 2020 and beyond. What should your plan be? Should it be one of continued optimism or should it be one of immediate preparation for a downturn, continued turmoil and unprecedented opportunity? Now is the time to be opportunistic and ahead of the curve.
Your company’s plan will be very dependent on:
- Business lifecycle stage
- Served industries
- Financial Health
- Strategic objectives which will need to change
- Supply chain responsiveness
- How you rethink your go to market plans – Market Effectiveness
- Significant changes in the regulatory environment
- Business process re-engineering
- Team involvement
- and many other variables…….
What plan will you create? Will you be in maintenance mode, or will you choose a more proactive strategy that includes paring cost, analyzing the profitability of your products and customers, implementing new cost takeout programs, financial or operational restructuring, protecting cash, etc.?
Creating the right plan will dictate how well your company will ride this wave and be prepared when the economy is back on track. Creating a recession plan is a critical activity and shouldn’t be taken lightly or done in a vacuum. You need to involve key stakeholders in your company and engage outside help to consider the plethora of options available to you in preparing for the coming downturn. The focus needs to be on mitigating risk to the top and bottom lines and preparing for the future. Time is of the essence on this one, and if done properly, your company will be healthier and better prepared to weather whatever the global economy has to throw at it.
Group50 and its partners have developed a recession planning webinar that will provide you with critical food for thought. You can see the recorded version of this one hour webinar where subject matter experts in Finance, Leadership and Operations discuss best practices and planning Do’s and Don’ts for creating your recession plan by clicking on the image below:
We have created several recession planning teams who are available to help your team address your recession planning effort via our Recession Planning Workshop.
If you would like to find out how Group50 recession planning teams can help you or members of your team write the next chapter of your company or parts of it, call us at (909) 949-9083, drop us a line at mailto:firstname.lastname@example.org or request more information here.
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