With the economic gloom engulfing the entire world and people the world over feeling the heat of recessionary pressures, it makes sense to find out ways to beat recessionary blues.
Some of the recognized and oft used measures to stave off recessionary pressure are:
1. Cut down the spending. Any spending shall be properly evaluated before committing on it. A penny spent shall have the capability of earning at least a dollar!
2. Reduce debts. During recessionary times, cost of financing any debt gets steeper and steeper, primarily because:
a. There is a paucity of revenue sources
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b. Lender is forced to increase the rate of interest during bleak economic times to tide over his own difficulties.
Even if all the debt cannot be repaid, ensure that financing cost is minimum.
3. Opt for stringent cost restructuring. An expenditure that seems normal during bright days may become a burden on the wallet during bleak economic times. It is advisable to scout for better and cheaper alternatives giving the same king of result.
4. Invest wisely. This means, there shall be a mix of equity and debt funds in the portfolio to lend a healthy sign to the investment mix. A single penny available during recessionary times would seem like a huge relief and hence, it is always advisable to keep investing a portion of the revenue earned during the bright days so that rainy days do not seem too dark & cloudy.
5. Stick to the core. This can have different meaning for different people. If you are a businessman, it means stick to your core area of strength and do not venture into new line of business. Similarly, for individuals who are in employment, it means that they shall not change jobs during recessionary periods because from employer's perspective new recruits would be the first to lose jobs during bad times.
Out of the above 5 mentioned measures, a business has to take care of 4 measures on its own. Only in one measure can the business expect to receive helping hand from an external agency. And that is in cutting down cost!
As mentioned above, a business needs to be extra careful in spending even a penny during recessionary period. It therefore makes sense for a business to categorize its functions and start outsourcing those that add up its overhead and not worth spending its money on. It would be advisable rather to spend the money saved from outsourcing on expanding business in its core area, thereby improving the scope of earning revenue.