How To Survive A Recession In Nigeria
The stability of any economy is never guaranteed. With constant ups and downs in the value of commodities due to unfortunate and unexpected inflation rates, staying prepared for any imminent economic recession is the smartest course of action.
How then do you turn out financially strong and cashflow positive in an economic recession? What measures do you take to survive a recession? And how can you carry yourself, your family, and your business along, through trying economic times?
In an economic crisis, only those that are both smart and persistent will survive. If you and/or your business are going to survive a recession, here are 10 things you must do!
See Also: How To Make Money In A Recession
1). Build Up An Emergency Fund:
Before or during an economic recession, it’s important you begin to set aside a certain amount of money from your income, monthly. This will serve as an emergency fund when you’re in dire need of a financial break.
An economic recession can ground your business activities and subsequently your personal up-keep budget. In the event that it almost does, the emergency fund you’ve preserved would serve as your bailout option.
It’s up to you to ultimately determine how much you choose to set aside every month. But no matter the sum you come up with, make sure it’s not less than 10% of what you earn monthly.
Nine out of ten times, only those with strong emergency funds will survive a recession.
2). Make Sure You’ve Paid-Off Your Debts:
Carrying a pressing debt into a recession can ruin you; especially when you have obligations you must fulfil to your creditors that carry dire consequences if you don’t.
When the economic cycle is going in the wrong direction, do everything possible to pay-off all your debts. This will not just help you know how much you owe and don’t, but will help you plan your finances in a clearer light.
First focus on clearing your debts with very high interest rates, then gradually move on to the lower interest rate debts. By doing this, your monthly expenses would be greatly reduced, and would give you a good chance of surviving a recession.
3). Identify Other Sources Of Income:
Surviving an economic recession doesn’t stop at just cutting down your expenses or putting away a good percentage of your income as an emergency fund. It also involves seeking out newer sources of income.
With a terrible economic situation in effect, seeking out and exploring other income streams will give you a better shot at pulling through. This could involve setting up a side business, having a second job, investing in more prospective ventures, and a couple of other things.
Since an economic crisis could cause your business to fold up or you to lose your job, spreading your income stream as soon and as wide possible is crucial to help you survive a recession.
4). Have A Talk With Every Member Of Your Family & Staffs:
In rough times, everyone has to be carried along. Let your family members understand things are not going to be as they were for a while, so they can become more financially conscious.
The same applies to your staffs. Let every member of your workforce understand the position of the company in the current economic situation, what it will take to stay afloat & probably experience some growth, and that the company needs their top notch focus through the process.
By carrying your staffs along, you build an aura of trust around your organisation. This doesn’t just make your workers treat you with more respect, but also makes them feel more secure in your company.
This short meeting experience will make both your family and staffs do everything to see you succeed, and survive the recession.
5). Reduce Your Expenses:
Surviving an economic recession largely involves you cutting down on your expenses. Have a look at your income and expenditures, then determine what to strike off or not.
While changing a lot is crucial to you surviving a recession, you, your family, and your business can still maintain the same quality of life, but only by striking off the most unnecessary extravagant expenses.
By striking off irrelevant items like yearly vacations, hotel sprees, luxury acquisitions, and more, you can use the bulk of the saved cash to focus on growing or managing your finances through the recession.
6). Save More, If You Can:
Don’t just stop at 10%. If you can, save more than 10% of your income. You need as much as you can accumulate to take you through rough economic times.
Saving more than you should, that makes you uncomfortable, will help you pull through tough moments, and also enable you take advantage of opportunities that require a certain amount of cash you may have put together.
7). Improve Your Work Ethic:
This is the time you have to go the extra mile. When do you wake up? When do you go to bed? When do you start the workday? When do you leave work?
Basic routines must be re-scheduled during a recession. Instead of 9 to 5’s for the workday, make it 8:30 to 6’s for your staffs. While you as the CEO, should work much later than you would have.
A bulk of your time should be focused on going the extra mile to improve your business, your customer service, your profit margins, and the value your company’s goods or services are adding to your clients or customers.
8). Train & Cross-Train Your Employees:
Train and cross-train every single one of your employees. Have them carry on newer roles together with their older ones. But offer them better incentives in the process. By doing this, your organisation would achieve more for less.
Enlighten your employees on the importance of improving their knowledge and carrying on more roles. Let them know their actions will determine both the future of the company and their place in the organisation.
With a great incentive to motivate your employees, they’d carry on more roles without you asking.
9). Resist Profit Eating Deals:
Increasing your sales is crucial in an economic recession. But doing that at the cost of losing your profits can be detrimental.
While mouth-watery deals could be a great way to gain many more customers, offering your products or services at ridiculously low costs can ruin your profitability in it’s totality.
It’s also important you know that while getting many people to patronize your company’s goods or services by offering unbelievable deals could work in an economic recession, many of those newly acquired customers would only buy again if they see another ridiculous deal, because of their unfortunate weak purchasing power.
10). Focus On Delivering Superior Quality:
A great service at the median market price will position your business for growth in an economic recession. Never compromise on your quality of service. It is what will differentiate your brand from the rest on the long run.
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What are your thoughts on these 10 ways to survive a recession? Let me know by leaving a comment below.
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