Posts Tagged ‘recession’
Startups have been encouraged to develop skills and not retrench their workforce to overcome the recession.
According to an international survey of senior business executives launched today by global business performance consultancy, McKinney Rogers, business leaders believe that putting their faith in developing the skills and abilities of their workforce is the best way to reduce an organisation’s exposure to the risk of recession,
With recent media attention focusing on the impact of sub-prime lending and the possibility of the current economic downturn turning into a full-blown recession, the survey, which encompassed Europe, Africa, Asia Pacific and the US, was designed to gauge awareness, perceptions and trends on the issue and what can be done to minimise the risk of a recession’s impact on global business.
Key findings emerged when executives and business leaders were asked about the importance of tactical actions in reducing an organisation’s exposure to the risk of recession.
An overwhelming 78% of respondents cited the development of their workforce as the key tool for this, while 73% agree that moving into emerging markets that are unlikely to be affected by recession is also important.
Diversifying the business offering was classed as significant for 67% of those surveyed.
Conversely, reducing the number of employees (34%) and reducing marketing spend (23%) were classed as the least important tactics to pursue in safeguarding against recession. Other initiatives cited in the research were cutting prices to become more competitive (38%) and consolidating business premises and locations (50%).
Commenting on the research, Richard Watts, Regional Partner for Europe at McKinney Rogers at McKinney Rogers said, “It is interesting to see what business leaders focus on when recession is looming – their workforce and diversification.”
Watts went on to say that at times of economic slowdown getting organisational buy-in as a whole is vital, which is why taking a strong leadership approach is such a key part of thriving during these times. Leaders need to instil the ability to re-energise, re-think and re-focus the business, using realistic targets.
“A company’s workforce is an essential tool in the business armoury when the going gets tough. Making productivity a focal point and rewarding those who rise to the top accordingly, will help reduce an organisation’s exposure to the risk of recession,” says Watts
Minimizing exposure to recession
When asked about the importance for businesses to have plans in place to reduce their exposure to the risk of recession, a staggering nine in 10 business leaders agreed that this is now very important. Despite this high figure, a relatively low number (32%) have advanced or very advanced plans in place, indicating that many companies might be caught short in the event of a recession.
Watts says, “these results clearly highlight a real understanding across the business community of the value of forward planning in limiting the damage of a potential recession, as well as the tactical actions that need to be taken to achieve this. However, it is worrying that such a low number of business leaders and organisations have these advanced plans in place.
“Any time, whether a recession is imminent or not, it is vital that businesses have their house in order by having a clear focus and strategy in place, as well as ensuring resources are suitably allocated to provide the best return on investment. That way, when a recession does strike they will be able to stay lean and emerge stronger.”
RECESSION? OR DEPRESSION?
What’s the difference between a recession and a depression? What’s a recession? How do we know if we’re in one? These are questions we all want answers to during these turbulent economic times. A glib definition is, when your neighbor loses his job it’s a recession. When you lose your job it’s a depression. The standard newspaper definition of a recession is a decline in the Gross Domestic Product GDP for two or more consecutive quarters. However, by using quarterly data this definition makes it difficult to pinpoint when a recession begins or ends. This means that a recession that lasts ten months or less may go undetected. The Business Cycle Dating Committee at the National Bureau of Economic Research NBER provides a better way to find out if there is a recession taking place. They define a recession as the time when business activity has reached its peak and starts to fall until the time when business activity bottoms out. By this definition, the average recession lasts about a year. What goes up must come down.
Periodic recessions are a natural part of any nation’s economic cycle. Most analysts pointed to fears surrounding the United States economy and a possible recession as the reason for the drop. Three days later, news outlets were already reporting a new economic stimulus package designed in part to try to prevent a recession. This isn’t the first recession news in recent memory. The old saying goes that economic forecasters were invented to make meteorologists look accurate. When the weather reporter predicts snow, one can look outside to see if the forecast is correct. But when an economist predicts a recession, the only verification is the opinion of other economists. Unlike snow, no one can be sure when a recession has begun, or when it has ended. Interest rates usually fall in recessionary times to stimulate the economy by offering cheap rates at which to borrow money.
Another indicator of a recession is a sudden rise-at least two percentage points-in the unemployment rate. Example: The general business recession caused high unemployment in the rust belt and low interest rates throughout the country. Whether a recession develops into a severe and prolonged depression depends on a number of factors.
A depression is a severe economic downturn that lasts several years. Fortunately, the U S economy has not experienced a true depression since the market collapse in 1929.
The Depression of the 1930’s was aggravated by poor monetary policy. The “New Deal” created many government programs to end the Depression, but government programs alone could not end it. We probably won’t see a depression like that again, simply because the government has learned how to avoid it. Many laws and government agencies were put in place because of The Great Depression with the express purpose of preventing that type of cataclysmic economic pain. It was the longest and most severe depression ever experienced by the industrialized Western world.
The Great Depression began in the United States but quickly turned into a world wide economic slump owing to the special and intimate relationships that had been forged between the United States and European economies after World War I. The Depression hit hardest those nations that were most deeply indebted to the United States, i e , Germany and Great Britain. The Great Depression had important consequences in the political sphere. In the United States, economic distress led to the election of the Democrat Franklin D. In Europe, the Great Depression strengthened extremist forces and lowered the prestige of liberal democracy. Prior to the Great Depression, governments traditionally took little or no action in times of business downturn, relying instead on impersonal market forces to achieve the necessary economic correction. After the Great Depression, government action, whether in the form of taxation, industrial regulation, public works, social insurance, social-welfare services, or deficit spending, came to assume a principal role in ensuring economic stability in most industrial nations with market economies.
Many factors can cause a recession to slip into a depression. Not the least being greedy CEO’s and inattentive members of congress. Probably the quickest, but least desirable, way out of a depression is war. WW2 is a perfect example. Economists cannot agree on the exact way to end a depression as no democracy has existed this long, so they have no road map to follow and are more or less feeling their way along.
There are two current theories under debate. 1) The unprecedented infusion of resources into the depressed economy will result in accelerated boom-and-bust cycles. This may result in the dissolution of our economic system as we know it. Or: 2) The unprecedented infusion of resources into the depressed economy will result in a long-term, painful recovery of our economic system. In either event, there does not seem to be a painless, “quick” fix that will make everyone happy and prosperous.
We’re hearing a lot about the economy lately. In fact, just this week, Alan Greenspan actually said “the r word” by announcing that the United States is in a recession. Our last recession, from 2001-2003, was due to the collapse of the dot-com bubble, the September 11th attacks, and accounting scandals such as Enron. There were also recessions in the early 1990s and early 1980s.
In fact, for the last 30 years, the U.S. has gone through a recession once every decade. There’s no indication that this will change in the future. Burying your head in the sand will certainly spell disaster for your business. Gritting your teeth to weather the storm will only increase your blood pressure and keep you up at night.
The good news is that a recession is not a depression. It’s unlikely that we will ever go through something like the Great Depression again. However, it’s quite possible that this will not be our last recession. To be successful, you need to become informed about what a recession is and what steps you can take to thrive in the midst of one.
What is a Recession, and What Can You Do about it?
A recession is a period of temporary economic decline during which trade and industrial activity are reduced. It is identified by a decline in a country’s gross domestic product (GDP), or negative economic growth, for two or more successive quarters. In short, a recession means a steady, prolonged decline in sales.
As a small business owner, you’ve experienced a decline in sales before. It’s a normal part of any sales cycle. Question is: When you’ve had a drop in sales in the past, what did you do? Did you just wait, hoping for things to get better? Or, did you take decisive action to nip things in the bud and turn things around? If you are a successful small business owner ‘ someone intent on creating a constant and steadily increasing cash flow ‘ then you know the importance of taking informed, resolute action.
Jack Canfield, too, knows about decisive action. He’s famous for his rags-to-riches story of how he committed to contacting five people a day to promote his book, Chicken Soup for the Soul. The key to his success was his commitment to action. Not just any old action, mind you. Aligned, well-thought-out, purposeful action. Jack knew he had a monumental task in front of him: promoting an unknown book by an unknown author. Each day he took action to increase name recognition, forge connections, and build sales.
Five Simple Steps for Thriving through a Recession, Jack Canfield Style
1. Get back to basics
Recessions are good for all things that begin with “re.” Re-group, re-organize, re-view. Revisit the fundamentals that have already made your business a success. Revise your mission statement to stand for what your business is really all about. Reject rejection. Practice Jack’s “Rule of Five”: Every day, do five things that will move you toward your goal.
2. Clean up your act
Recessions are a great time, Jack advises, to clean up your messes. Now, when sales are slow, finish anything that is incomplete. De-clutter your office and organize your files. Make phone calls to bridge any disconnects that may have occurred between you and your customers. Magnify your success energy by focusing on what you want to happen, not what you are experiencing.
3. Focus on your connections and relationships
Recessions are the perfect time to forge new connections and strengthen long-standing relationships. Practice uncommon appreciation. Review your agreements with clients and confirm your commitment to them. Speak first and with integrity. Be impeccable in your communication. Meet for breakfast instead of over the phone. Supplement emails with handwritten cards and notes.
4. Be smart with your money
Recessions are the natural time for small business owners to review their financials. Take a look at your cash flow. Collect on any outstanding accounts. Don’t fall into lackful thinking by clutching and holding onto your money. Spend wisely. Make sure your bills are paid. Above all else, give more. Keep your energy flowing by finding a way to serve others.
5. Step back
Recessions are the ideal time to practice stepping back in order to keep things in perspective. Instead of energetically aligning with all the fears, doubts, and anxieties associated with a recession, step back and move to higher ground. Don’t get caught up in others’ panic. Soar above it all to a place where clarity can be gained and perspective maintained. While you’re at it, take others with you. As Jack says, “When you lift up others, they will lift up you.”
No one likes feeling uncertain about the future. Yet nothing is ever certain, whether or not we’re in a recession! By taking decisive action now, you can positively influence your future. When this recession ends, don’t let your company be one that just managed to survive. Practice Jack’s Rule of Five and thrive.
Are you planning on remodeling your home? If so then you will eventually need to replace or add some wall receptacles. There are many different types of wall receptacles to choose from and each type has its own set of unique benefits. In order to determine which wall receptacle to use, you will need to examine your situation.
What is going to be plugged into the wall receptacle if anything at all? This can be a very complicated question to answer when you are create a new home but you should look at the blue prints of your home and act accordingly.
A recessed receptacle is a wall receptacle that is recessed into the wall. That means that your receptacle is actually behind the wall so to speak. A recessed receptacle can come in handy in many different situations. For instance, a recessed receptacle works well when it is used as a power outlet for a flat screen television because it happens to be recessed into the wall. That means that you have more space for the plug. This will prevent having sharp bends on the power cord. As we all know, sharp bends on a power cord can actually ruin the cable.
A clock receptacle is a tad bit different from a recessed receptacle. A clock receptacle is better than a recessed receptacle for certain situations. A clock receptacle, as the name implies, is often used for clocks. A clock receptacle allows the cord to be plugged into the receptacle yet sit back into the wall.
These receptacles are usually equipped with a hook on top which allows a clock to hang from it. You can also use a clock receptacle for many different things. For instance, you could use one for a wall mounted flat screen television since it is recessed into the wall as well.
When used behind a wall mounted flat screen television, a clock receptacle allows more room for the cord. This will also prevent the cord from being bent at any sharp angles. As mentioned before, a power cord that has sharp angles can be potentially ruined. A recessed receptacle can be used for several different things as well. It is common for people to place lights in front of a recessed receptacle. It is also common to place paintings that are equipped with lights in front of them as well.
While clock and recessed receptacles can be used in many types of situations. They are now being used more often with a flat screen television. This is become more and more common because flat screen televisions are becoming much more popular and common in homes all around the world. Clock and recessed receptacles are capable of preventing the television’s power cord from getting all bent out of shape. In the end this will mean that your television’s power cord has a much longer life span. This is extremely important considering the high prices of most flat screen televisions.
What is Recession, the recession is known as the state of the decline in the economy sector; a widespread decline in employment, in the GDP and trade lasting from six months to a year. Current economic environment in the USA is facing severe period of the recession. We can easily note employment decline in certain areas including housing and industries, as losses in these areas are widespread. Many people are searching reliable ways to lower the financial risks in this difficult period of the recession. If you want to minimize the effects of current recession period you should take some effective steps to make the current situation risk-free for yourself.
First you need to cut back unnecessary spending during the recession that will leave some disposable income for you. If you are paying some debts, then you need to reduce the amount you pay each month to your finances. It will take off your strain to some extent. You can do it easily by consolidating all your debts into one mortgage repayment along with low interest rate. Various people end up of paying huge amount on their bills like electricity and gas bills, mobile bills, broadband bills, landline bills and also insurance premiums in every month.
You should get surety that you are not paying more than your needs on these bills, as you can seek assistance from the comparison sites to see whether you can move to cheaper deal or not. In this way, you can save a considerable amount of money each month. Any amount that you have saved on your monthly outgoing, you can place into your saving account.
This amount can prove handy at the time of emergency when the period of United States recession is in full swing. You should know that currently interest rates are on the down so you need to check credit cards and mortgage rates to get surety that you have almost competitive deal. If not, you need to switch to more competitive finance provider. Make these changes in your life as these measures help you to minimize the effects of the recession when it will come to your finances.
The US Banks
Some of the largest and most innovative banks in the whole world are found in the US. Banks in the US are watching one another, the rest of the banks in the world always seeking what to do next.
US banks provide financial support to the most developed economy worldwide, and so their importance has grown within the global financial market. They range of products and services they offer, is wide and varied, be it personal business or corporate, institutional banking or any other type. With the use of the most advanced internet services on the market, banks in the US can easily be accessed anywhere and at anytime.
Among other, here is a list of services US banks provide:
• Personal Banking Services of Banks in USA
Personal banking services have been created to cater to daily requirements of consumers, such as checking products, plus internet banking free of charge, ATM/debit card facilities, online bill payment, monthly statement, opening deposits, etc. Loan products available in the US banks come in the form of home equity loans, car loans, or personal loans. Among the most common forms of saving money are the certificates of deposit or passbook savings.
• Mortgage Services of US Banks
US banks also offer a range of mortgage services, carefully designed to take care of the various mortgage needs of customers. Together with standard mortgage services, banks also provide mortgage calculators for clients to easily calculate the payment schedules they will have as well as monthly payments, mortgage amounts, and many more. Besides online mortgage services are also available, making the process of mortgage even easier and hassle-free.
• Business Banking Services of Banks in the USA
US banks also offer business banking support for corporate clients. Checking business accounts or seeing to all other financial needs businesses, such as commercial loans or construction loans, offered for business operation, equipment, or commercial real estate purchases are just a few operations US banks deal with.
• Other Products and Services of Banks in USA
Other banking products the US banks offer include agricultural loans or checking accounts. There loans help investors purchase machinery, livestock, and even real estate. Besides being cheap, checking accounts are also easy to operate. Among the facilities offered by online banking there is checking balance, funds transfer, or bill payment anytime and anywhere.
The largest banks in the US by deposits, are Bank of America, JP Morgan Chase Bank, Wachovia Bank, Citibank, Washington Mutual Bank, SunTrust Bank, US Bank , Regions Bank, and so on.
USA economy enters 2009 in adverse financial crisis. The financial system meltdown in last fall season is unresolved. Now the economy is in economic recession with regions and industries sufferings. New administration in the USA has given surety to victims with promise of shoring up the condition of economy and is willing to plan unprecedented initiatives to resolve it. According to recent recession statistics, the growth of real GDP is expected to drop nearly 5.6% in almost fourth quarter of 2008.
The results are not satisfactory as the spending of the consumers is falling; export trade is weakening and housing prices continue to decline. Even the near-outlook is not in good condition with another decline in ratio of real GDP to 5+% slated in the first quarter of new year 2009, but now there is hope of recovery in it. The period of recession in the USA, started in December 2007, is expected to last 20-24 months which is considered the longest recession history.
USA economic recession is considered the longest recession in the post-war era with the second largest peak dropping in real output. But you have to wait a lot for recovery as a return to solid growth needs at least a year. Recession period also affects the labor market to great extent. Employment fell almost 500,00 per month in the last four months of previous year 2008 and now we still expect similar losses and recession job crisis in the beginning of this year.
December 2008 marked as the 12th consecutive month of jobs losses and the decline of cumulative payroll currently stands at 2.5 million. We think that these are just a few statistics of the losses anticipated during the cycle of recession. It also increases the rate of unemployment which has moved to 7.2% reaching at the highest peak in 15 years. If things go in this manner, we will see awesome rising above 9% in the rate of unemployment by early 2010, highest rate since early 80s. We need some effective recession tips to tackle this situation wisely.
Economies fluctuate. They experience waves of growth and decline. And businesses, like boats, ride those waves. When the economy is good, businesses prosper; when the economy is bad, businesses are at risk. Recent signs suggest that we’re facing an imminent recession. Will your business be at risk? In this article, we will look at the coming recession and outline 7 ways that you can reduce the risk to your small business.
In its simplest terms, a recession is a lack of money in the economy. When people hear that there could be a recession, they spend less. And guess what happens! Demand for goods drops. As a result, demand for manufacturing drops. Then, demand drops for employees to do the job. And because of the threat of job-loss, people spend less. It’s a vicious cycle; a self-fulfilling prophecy. The secret to ending a recession is to get people to spend. That’s why the Federal Reserve (and similar central banks in each country) increase and decrease interest rates: Lower interest rates lead to more loans and more spending. Higher interest rates lead to fewer loans and less spending.
A recession is merely part of the economic cycle. We may not like it, and the central banks are effective at minimizing its severity, but a recession is bound to happen. And because it is a self-fulfilling prophecy, the more we hear about job cuts and recessions and stock exchange losses, the more likely we are to put our money under the mattress instead of spending it… which is exactly what fuels a recession!
Increasingly, news reports indicate that a recession is imminent. Even if you choose to spend your money instead of bury it in the backyard, you can be sure that there are millions of other people out there right now who are digging holes in their lawn or tucking an envelope under their mattress or reworking their budget to exclude frivolous spending. So, we can be sure that a recession is coming. Is your small business ready for the recession?
Here are 7 ways that you can prepare your small business:
1. Rework your sales material: It’s time to dust off those brochures and breathe new life into your website. Each sales piece will need to work extra hard to generate the same amount of sales. That could mean freshening up the content, sharpening the pitch, or clarifying the benefits. This is one reason to welcome a recession: if your revived sales collateral can sell in a recession, chances are that it will sell even more effectively in a period of economic growth.
2. Reposition your offering: Remember that people avoid spending their money in recessions, unless they have to. And there are some recession-proof industries which sell products that people need, no matter what the economic condition. Food and shelter are two examples. But what if your small business serves a need outside of the most basic needs that people willingly spend on during a recession? What then? One option is to align your business with one of the necessary industries. For example, you could rewrite your website content to show the importance of your product or service right now; to demonstrate why your product is, in fact, a necessary industry. For example, if you sell car tires, you could show how tires are an excellent investment because they keep families safe and ensure that people get to their jobs on time.
3. Offer additional products and services: With fewer people buying, and with consumers needing a greater reason to buy, this might be a good time to test a handful of ancillary products. One example for e-businesses might be a free bonus ebook. Create 3 or 4 bonus ebooks and allow a customer to select one as a free gift. Keep track of which ones are selected most frequently. Then, when sales pick up again, be sure to include that ebook as a sale-inducing bonus all the time.
4. Explore partnering opportunities: When the economy is smoking hot, businesses don’t always have time to brainstorm ideas with other businesses. But if your small business is looking to stay afloat, there’s probably another one in a similar situation that would be willing to talk. To find that business, forget what you offer. Instead, think about who your customer is. Identify small businesses that market a different product or service to the same customer. Approach them and talk about doubling up on advertising or perhaps selling the other’s products on consignment.
5. Reach out to previous customers: Your happy customers are a resource to you. It’s easier to convince them to buy from you again and they act as evangelists for your business to their family and friends. Even if you don’t normally reach out to this group, consider changing your habit for the next few months. Create a promotional letter, ezine, or special website where you can thank them for their previous business, offer them another product at a discount, and encourage them (with an incentive) to send you more business.
6. Relax; it won’t last forever: The recessions experienced in North America in the past 50 years have all lasted, on average, about 12 months. Maybe a few months more, maybe a few months less, but generally about that amount of time. While those months can be devastating to some small businesses, it is unfortunate that many small businesses adopt the incorrect notion that the downturn will continue on indefinitely and they take drastic measures based on that line of thinking. However, economies are cyclical and they do move through recessions back into periods of growth. So businesses that tighten up moderately — not drastically — will weather the recession much more effectively and will be better positioned at the end of it.
7. Get ready for growth: During a recession, people buy less so companies are often more flexible and willing to make a deal. Think long-term and buy your raw materials and equipment in advance. As long as your negotiated bulk discount is more than the cost of storage, you’ll come out ahead because you’ll be able to produce finished products faster (and at an overall lower price) than your competition, once the market heats up again.
It would be great if the prediction of a recession turned out to be wrong and you didn’t need this information. It would be great if small business owners could adopt a “business-as-usual” approach without any worry that their customer-base might suddenly disappear in the coming months. But there’s a good chance that there will be a recession shortly. If you take action now, your business will be better prepared for it.
Managing your finances is one of the most difficult jobs for any person. And when it comes to managing your finance during recession, you really need to take some helpful tips from a financial advisor. But this will also be a costly task as the financial advisor will also charge his fees. Here’s an outlook into the matter. As you proceed reading this article, you will be able to gather some important useful tips on how to manage your finance when you are falling into the lap of recession.
Before we start to discuss where and where not to utilize your available finance during recession, let’s get to know what a recession actually means. Reduction in an economy’s GDP or gross domestic product for a period of continuous three quarters is referred to as recession. However, NBER, National Bureau of Economic Research formally defines a recession as three consecutive quarters of falling real gross domestic product. Surviving during recession is not an easy task. Many people who were earlier making it from paycheck to paycheck are now held with no or little money. Generally, recession lasts for about 6 to 18 months. But this duration may somehow seem to be a longer one as people go on with lesser money in hand.
We present to you some helpful tips on how to manage your finance during a recession;
1. Make it a habit to check your bank account on a regular basis. Maintain a statement of coming in and going out of cash. Always try to make the payments on time as this will not increase the interest rates on them. Keep an up to date cash flow forecast.
2. Try to reduce your daily expenses as much as you can. This involves the calculation of every single penny being spent on buying the daily needs. Stick to necessities. Make a clear account of each single penny being spent. Each single penny is essential during the recession times for which you will appraise yourself later.
3. Credit cards increase debts. As long as you carry a credit card with yourself, you are sure to spend on unnecessary things which will ultimately increase your debts. So try as much possible to keep away your credit cards.
4. Avoid borrowing money from anyone. As long as you continue to borrow money, you keep yourself sinking in to the weird situation of recession. This way you can never come out of recession with a stable financial standing.
5. Continue to pay the premiums. When you continue paying the premiums, if any, you are in a way securing your money. This is because this premium amount will come back to you and that too as a huge amount. Also if you pay the premium which is going from a long time then you save those premium amounts which have already been paid in the past. And if you discontinue paying the premiums then you may lose the amount which has already been paid.
6. You should look for extra sources of income other than your ongoing one. This is how you can increase your income. No matter if extra income comes to you in smaller amounts, but do keep looking for options to generate it. For at least, something is better than nothing. Do not waste time rather spend it on earning extra for yourself. It would certainly help you in longer run.
You have to, at any cost manage your finance during recession as there is no other way getting out of it. Managing your finance and earning extra income seems to be the only mantra to keep yourself going during recession.