EXPERTS have been predicting another recession for the last couple of years, and now, with the sudden and shocking arrival of COVID-19, there is a certainty that it is coming now and will be worse than imagined, perhaps even equal to the Great Depression.
Many of you will be worrying about what this means for the future, particularly if we have a business.
While it is good to be prepared and to understand the enormity of the issue, we shouldn’t try and predict where the future is going or get too down about it. There are lots of ways we can protect ourselves and keep our businesses healthy regardless of the economic crisis.
It’s time to start looking at our financial situation. Do you have savings and are you currently investing? If so, this could be an excellent time to make some changes. If you have money tied up in property or shares and you have a tight cash flow, then releasing some assets now and putting the cash away could be a sensible move. If you are running a business then maybe consider looking at parts of the company that aren’t making you money. What assets do you have that you could afford to lose, to keep the rest of the business viable?
When we head into a recession, banks often lower the interest rates on loans. This is a great time to look at any finance you currently have from property to credit cards. If you can remortgage or switch your lender, you might free up more cash each month. This applies to your business loans too. Lenders get quite competitive during a crash, so shop around and see if you can stabilize your finances by lowering your outgoings.
If your business is looking healthy and you have a strong cash flow, you might start looking at how you could make money once you get to the other side of the recession. One option is property. This could be commercial or real estate. Property prices fall dramatically during a downturn, especially commercial property. With the right investment now, you may be able to expand the business at a really low price. If you are already in the business of property investment for quick turnover, then you could look at some ways to increase your revenue. Wholesale investors can participate in Visio’s partner program, which brings them in money through referrals. This could be an excellent lifeline to boost your cash and add another revenue stream to your income.
The most important thing to remember is not to panic and not to sit still. While no one can predict how deep the recession will be, preparing for the worst is always going to make you stronger. Spend this time looking hard into your current position, how long can you survive in the state you are in. Then look at innovative ways to change the way you create income to support your business and your financial future.