03/09/2020
As you will no doubt be aware, the recession that was becoming inevitable as the impact of Covid-19 started to show has now officially been confirmed.
Fortunately, most of us remember the 2008 recession and while each recession has historically impacted on different sectors in different ways, we can learn some lessons from the 2008 recession.
Firstly, tighten up your "fixed" business expenditure. Fixed costs, such as rent, interest and loan repayments have become negotiable over the last few months due to the packages introduced to ease the impact of coronavirus economically.
Secondly, look at your "variable" expenditure, such as the cost of the product you ultimately sell, distribution and labour costs, are slightly more difficult to manage due to supplier pricing and the link to the number of units you sell. However, streamlining your product offering (condensing your menu in a restaurant for example) allows you to streamline your resources accordingly.
Thirdly, and this may not be available to everyone, but look to refinance existing debt. The interest rates are at a pretty much all-time low and if you have any debt with higher interest rates than currently on offer then you are parting with more cash than you need to!!
Bookkeeping is a vital service during a recession. You need to be aware of what you are paying, and when you are paying it, in order to manoeuvre your business to cope through the economic downturn. If you feel that your record keeping isn't fit for purpose, or that you are spending too much on this service, get InTouch!