As an entrepreneur when trying to scale up and maintain your top position, you need to understand the good and the bad side of every situation so as to know what to prepare for.
Hi everyone my name is Timileyin and in this post i will be telling you 5 basic things to watch out for just before or during an economic recession.
This post is important not just to an entrepreneur or a business owner, but also to a financial analyst, an employee in a firm, a student, everyone. Why is it important to everyone? It is because everyone is affected by economical changes.
The first thing to watch out for is
DECLINE IN SALES
This is typically logical. An economy in a stage of an economic breakdown will most often than not lead to a drastic decline in sales.
Although the effect may not be felt at the same frequency everywhere because there are some goods you can’t do without so people generally tend to purchase those goods even when the economy is seemingly not favourable.
Now while sales are declining, there is a very high possibility for prices of goods to sporadically increase thereby making the market more stiff for both the sellers to sell their goods and make profit and also the buyers to buy their goods at affordable prices.
Therefore as an entrepreneur/business owner, you have to have this courage to go through this period and also to be able to envisage it long before it comes so as to prepare adequately for that downside period.
The second thing to watch out for is that
ENTREPRENEURSHIP WILL NOT BE ADMIRED
At this present age, people see entrepreneurship as something they can just hop into because they have an idea or because they have a little bit of experience in that field.
The truth about it is that being an entrepreneur takes a lot than just having an idea or a little bit of experience, it takes discipline, hard work, tenacity, sacrifice and the list goes on and on.
Having said that imagine not being in an economic uproar when everything is really not as good as before, at these times, entrepreneurship will be hated, not be admired and people will more than scared to start an entrepreneurship career talk less of investing in one.
The third thing to watch out for is that
COMPANIES WILL WATCH HOW THEY SPEND THEIR MONEY
This is a logical thing to expect.
As an entrepreneur/business owner, once there happens to be an economic meltdown, there is bound to be a decline in the way you spend, if your business requires you buying goods to your store, you can reduce the quantity you are buying and also focus on the most demanded goods.
At times like this, most investors will be careful of how they invest and wont invest except they discover that your business is worth it and is also within their budget.
The fourth thing to watch out for is
This is one of the deadly impact of an economic recession.
As a result of businesses not willing to spend,sales not improving, no business or company will want to employ more hands in the operation of the business and also entrepreneurship will be a no go area because of the state of the economy.
This therefore leaves everyman to fend for himself which now leads to youths being notorious and crimes being rampant.
The fifth thing to watch out for is
THE RISE IN SAVING RATE
This arises when there is little to no confidence in the economy, entrepreneura/business owners tend to save more money to avoid the risk of losing it when trying to utilise it in the market.
This is generally a human instinct to avoid being the one at loss and this consequentially leads to a decline in inflation when there is low circulation of funds in the economy.