This article is published as a part of a partnership with Recruitery. Recruitery is an all-in-one hiring platform that provides headhunt, payroll, taxes, and compliance solutions for remote teams in SEA.
Although the COVID-19 pandemic has been controlled, an economic downturn is still heralded due to the disruption of global supply chains and soaring inflation.
Across Southeast Asia, micro, small and medium-sized enterprises (MSMEs) have suffered massive losses in income and capital due to COVID-19. Small businesses also face new challenges, such as higher business costs, growing debt, and operational uncertainties that require structural reform to improve the local business environment.
If you’re running an enterprise, you better find ways to align your overall strategy and business model. For many company leaders, this presents a significant challenge. For example, how to deal with a recession?
After experiencing two terrible waves of the pandemic in Vietnam and achieving specific achievements, we have some practical advice below which can help small businesses better prepare for a recession:
Make decisions carefully
While you will likely need to adjust your business shortly, don’t make decisions irrationally or quickly just to make them.
Seek the advice of boards, advisors, mentors, and others who have experienced economic uncertainty. Then, combine your complex data with realistically honest trend forecasts.
Don’t be paralysed by analysis or consensus group thinking. Instead, get your data, input from the leadership team, advice from a mentor or mentor, and then make a decision.
In 2020, our company had some problems because we were almost paralysed and did nothing. However, by making careful decisions by 2021 and this year, we can confidently state that, before any of our choices are made, we have considered them very carefully.
Pay attention to even the slightest problems
As you consider your business strategy, business model, and revenue forecast, it’s necessary to make small decisions because if you wait and assume things will be better in the future and just wait, you may be unprepared or unable to weather a recession.
Also Read: Why Southeast Asia’s locally owned adtech and martech industry will survive the recession
We have a tip: look at your business model and move people and resources into areas that will generate or protect revenue. For example, it is possible to cut spending on advertising media and use services like retargeting, email marketing, or better social media efforts soon.
Cost control
This is crucial regardless of whether you are a large or small business. You must control your costs in the best way.
For founders to make a profit first, they need to widen their runway and make the money they raise go further, especially during an economic downturn.
If you’re in a large company, you’ll receive an email, if you haven’t already, to manage your area, division, and division expenses for the rest of the year.
Cash management
Perhaps not much need to be said about the necessity of cash management. This is the “blood” of every business.
Manage your cash, whether it is through more aggressive efforts in accounts receivable, negotiating payment schedules with vendors in your accounts payable, or keeping staff expenses in line with stagnant wages and few hiring.
All are important right now as your primary goal should be to generate strong cash flow in the business.
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