The more debts you have, the more cash you need to make your interest and principal payment. When a recession hits, less money is coming into the company, and access to capital slows during a downturn. Companies can overcome debt obligations by issuing equity. If a company thinks the recession is coming, it should deleverage.
For example, during times of economic difficulty, many governments will authorize generous budgets to aid its citizens. Hong Kong is the same, and many grants, rebates and loans are being made available. It is important for your business to know of the government assistance that you can seek.
For example, take advantage of the Export Manufacturing Fund, which can aid your expansion into foreign markets. This will help increase your customer pool, and allow you follow the demand.
Invest in your customer relationship
Focus on your current customers by creating the best results and experience for them instead of investing so much in attracting new clients. It is much easier and cheaper to get a repeat client through excellent service and delivering on your promises than a new one through advertisements and other marketing strategies. Happy clients, in turn, bring more clients by sharing their experiences with other potential customers.
Plan your finances
You do not know how customers spend; however, you can estimate their spending patterns and adjust accordingly. Consumers always want to get more value on their purchases. Work on your marketing strategies to highlight your value. Do not stock inventory just for shelving sake, only stock the needed amount and have frequent deliveries from your suppliers.
Be sure you are attracting your ideal clients and have finances in place way ahead before you need it. It is always advisable to look for finances before you desperately need it, and when there is no high demand for the financial lending facilities.—starting early also gives you time to gather documentation like financial statements and to evaluate your options.
This means it is important to look at your own accounts and manage your finances. When you are in a recession, every dollar counts. It is important to plan your money and cashflow. Paul Hype Page is a trusted advisor in the region, with years of experience, and we are able to assist in your annual compliance needs.
Position your business for success before the economy starts to slow down by recognizing that you have a choice to be a business owner who makes adjustments needed to leverage the opportunities that inherently arrive in a recession.