Four tips to get your business recession-ready

The economy isn’t great at the moment and it’s a struggle, MotorPro uncovers four of the best ways to protect your business

1. Set your team a challenge

“Challenge yourself and the team to reduce expenditure by 30% to see what ideas emerge,” says Eric Partaker, former head of business development at Skype, business coach, and entrepreneur.

2. Embrace transparent leadership

Modern leaders are open and honest with their teams about the challenges facing the business. Gone are the days when staff are kept in the dark. “As leaders, we all have to step up and have integrity about how we lead,” says Carl Reader, serial entrepreneur, business adviser and author of Boss It. “If a recession hits the business, we need to be open with employees, even if it’s bad news. This approach builds engagement and actually encourages people to go the extra mile. Consider introducing a weekly meeting to acknowledge the challenges of the world, head on, and reassure them you have their best interests at heart.”

3. Think carefully about how you incentivise staff

If you want to keep your top people, you may be tempted to offer pay rises. However, with a recession around the corner, it’s best not to commit to a permanent pay rise. “I recommend offering a bonus instead,” says Reader. “You can even call it a discretionary bonus to help with the cost-of-living crisis. Make clear that the bonus is based on the continued profitability of the company.”

4. Don’t be afraid to take risks

“In 2008, slap bang in the middle of a really bad time, we bought Max Spielmann, our venture into photo,” says Sir John Timpson CBE, who turned his eponymous chain of cobblers into a household name, says. “This week, we will take £1m in passport photos through this business, which is extraordinary. If we hadn’t bought this business, against the odds, we wouldn’t be in this position.” Listen to your instincts as an entrepreneur, he says. “Don’t strain too much – the best ideas tend to hit you round the head.” The punt on the photo business succeeded, in part, because of the downturn. “All our competition disappeared,” explains Sir John. “Keep your eyes and ears open for opportunities at a time when others are running scared.”

For even more advice and tips to help your business in the face of difficult economic headwinds, checkout the latest issue of MotorPro magazine