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Seven steps to plan positively for the next recession

Everyone seems to agree that we are on the verge of a worldwide recession. Whether or not this is the case, the economy is facing difficult times and this will affect many businesses.

However, as a business owner, there’s no need to despair; a recession can be an incredible opportunity for your business. This is the time to really think about how world economics will affect you: what are you going to do, twist or bust?

Whilst it’s true that some businesses do suffer during a recession, others enjoy strong growth. So what determines whether you’ll thrive or dive? Is it luck? Being in the right industry at the right time? Getting a lucky break? Maybe… But we can’t plan and strategise based on luck. It’s not about a roll of the dice; it’s about showing the economy who’s in charge!

Now is the time to take control of your business and do what is necessary to make sure your company not only survives, but prospers in the current economic climate.

We’ve spoken about the following strategies before, but this is an ideal time to revisit them. The holiday season’s almost over and we’re heading swiftly towards this year’s final quarter – and then onto 2020. How time flies!

These strategies are things that we should all be doing on an ongoing basis to ensure our businesses are profitable; but, as we are aware, we all get so caught up in the day to day running that we do tend to neglect the simple things.

1. Know your Breakeven Point

Understanding what level of turnover your company needs to achieve to break even is of the highest importance. Remember, “turnover’s vanity, profits are sanity!”

2. Lay down figures

On a simple level, list out all of your business’ monthly costs and then determine what you need to sell in order to break even. This may be trickier or more time-consuming than it sounds, so we have set up a really useful pro-forma spreadsheet that you can use for exactly this purpose. Let us know if you’d like us to whiz a copy over to you.

3. Set targets

Setting targets is really important! Make sure you set and monitor your sales and costs over the course of a whole month, so that you show a profit after your salary/dividends/drawings. And remember that, if you only aim to break even, you will probably lose money, so be careful what you set yourself as a target. Be realistic, but challenge yourself! Our Strategic Business Team are fantastic at helping clients to set – and smash – their targets. They’ll be happy to chat if you need help to pitch it correctly.

4. Look after your cash flow

For the most part, your expenses don’t change, but the amount of cash flowing into your business is never guaranteed. Send invoices regularly and keep an eye on money coming in. If clients are regularly paying you late, deal with this before it becomes a serious issue.

5. Capitalise on your current customers

Expanding your client base is always beneficial, but don’t forget to stay in touch with your loyal customer base. You can potentially increase sales by cross-selling or upselling other services to them, and this is significantly cheaper than marketing to new prospects.

6. Keep an eye on your competition

You should always know what’s going on in your sector and, ideally, how and why your competitors are gaining new business. It’s easy to research what they’re doing by signing up to their email lists or keeping an eye on their social media pages.

7. Stay in credit

Even if you do everything right you could still end up in trouble due to the unexpected nature of business’s financial twists and turns. Making sure you have a good credit score will stand you in good stead if you need to raise temporary funds to keep your business stable.

Although it’s impossible to say exactly what will happen in a recession, it’s always important to make sure your business is in the healthiest state possible, regardless of the UK or world economy. Start by ensuring your financial practices are in order and strategise accordingly from there. The seven steps offered here are simple ones that you can implement yourself, but of course we are here to help and make the process quicker and less painful if you need us.

Beyond Accountancy

At Nordens, we're more than just accountants - we're business experts who can help you achieve your biggest goals.

Nordens Strategic

Our specialist strategic division at Nordens boasts some of the leading entrepreneurial business minds in the country. We cater towards delivering consistent success stories, whilst helping businesses achieve above and beyond their initial goals.

Through highly-tailored guidance, coaching and advice, Nordens Strategic are able to define exactly how your business can reach new levels of success.

Regardless of how you define ‘success’ for your business, our strategic service is guaranteed to bring about real and lasting change. By partnering with some of the UK’s top business coaches, we’ll steer you along the path to a greater future.

Accounting 2 You

Every business, no matter how big or small, needs to make the right decisions, and how to best manage your accounts can put huge question marks over your business. Accounting2You is here to take that pressure off and provide you with all the answers you need.

Our bookkeeping branch offers a fully inclusive, comprehensive service that you can trust. Since 2005, our specialist bookkeepers have been successfully managing the accounting of both individuals and small businesses.

With experts in payroll analysis, credit control and financial recording, Accounting2You will lead your business efficiently, and with real purpose, towards a prosperous future.

Voted as EXCELLENT - 9.9 out of 10 based on 164 reviews

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Chris Dyer

Director - Metro Bank

Nordens are always very easy to deal with and extremely professional and efficient. I would have no hesitation in recommending them to my clients for their accountancy needs, no matter how complex they may be.

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Jamie Brown

Co-Founder - Chicmi Limited

Very good to work with - the team go above and beyond to make the accounts easy and efficient. They're all super friendly and a joy to work with.

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Simon Rose

Director - Rose Opticians

I have been using Nordens Chartered Accountants for 5 years and very happy with the service provided. All members of the team are very knowledgeable and have a wealth of experience which has proved very beneficial to my organisation

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Rebecca Bossick

Founder & Director - Physio LDN

Very easy to contact and put me in touch with the right person whenever I need to ask any questions. Extremely knowledgeable and can help me manage my various businesses whenever I need.

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James Aconley

Principal - Pauline Quirke Academy

Great accountants, always available to offer advice. The team have transformed my business.

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Christopher Wilce

Founder - Dataphone

Having worked with Nordens over the last 5 years, not only to look after my annual accounts but they have also provided outstanding professional advice. They have guided me through a Company share buyback with clear and objective advice. We have also been using Nordens strategic services for a couple of years, which has helped bring about significant improvements that exceeded my expectations. With experience of working with several local accountants over my 29 years in business, I’m very pleased with the service I have received from Nordens.

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Dave Hodges

Director - Linekers

Trusted our business with Nordens for over 10 years now and watched the company grow into the successful innovative business it has become today. Deservedly so. Every aspect of financial advice we need is always given promptly and with a smile. We have total confidence in all aspects of advice Nordens give. If you are looking for accountants, its a no brainer!

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Tony Charles

Founder - Foundation Sports Limited

A fantastic, modern, vibrant firm that care about the clients and their staff in abundance. It is rare to find an Accountancy firm with such vibrance and focus and relationships. It is no wonder they win award after award in their field.

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Peter Horlock

Managing Director - Prime Time Boilers

I have been with Nordens for many years now and they are a great accountants.

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Simon Cushing

Founder - Vivid Finishes

We have used Nordens for the last 5 years and have had a great service throughout. The guys are very passionate about what they do and have played a part in the growth of our company, highly recommended.

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Andrew Martin

Managing Director - AMD Interior Architecture

Great Service at Nordens from a friendly very approachable team Particularly Kirsty Willis and Joe Sword who have been helping us since we started the business in 2016.

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James Robinson

Director - Forma London

Nordens provide a first class service. We moved to Nordens last year and have been impressed with the level of service provided. Keep up the good work!

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In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier. The difficult part, for me, was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.

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Our limited company accountants have a range of qualifications from The Institute Of Chartered Accountants (ICAEW) to the Association of Chartered Certified Accountants (ACCA). We worry about the bye-laws, regulations and ethical guidelines of the ACCA so you don’t have to! That makes us an ACCA-accredited employer as well as a Professional Passport-accredited one!