5 Tips To Prepare Your Business For Recession
No one can know for sure when there’s going to be an economic meltdown. However, the volatile market and financial uncertainty are making experts, which includes the International Monetary Fund, suggest that businesses should be able to get themselves ready for a recession that will affect companies across the globe.
David Lipton of the IMF agreed that businesses are indeed not ready for an unstable global economy. He gave a piece of timely advice when he said that the companies should “fix their roof while the sun is shining.” Lipton said that storm clouds are not that far and crisis prevention is still incomplete.
Innovation at a Time of Uncertainty
At a time when the economy is not very stable, what can businesses do to best prepare themselves? When the market is volatile, organizations act the same way that humans do: it’s either a fight or flight situation. Many companies lean towards locking their doors and cutting down costs.
However, it is still important to listen to experts – including analysts from McKinsey and Deloitte. These experts state that companies can emerge triumphantly from an economic instability when they continue to invest and innovate.
Companies should be able to prepare for times with rapid change. It is the vital period where investing and innovating are most needed. Studies state that investments in innovations are the primary areas that suffer during economic downturns.
Businesses are burdened by the challenges of cash flow and debt in which they become paralyzed by the increasing debt-servicing costs and interest rates. Because of this, companies become reactionary. What they do is that they cut the costs, looking only at the short-term view.
During post-recession, these same companies are the ones that grew slower because their competitors were more agile while still
It means that these companies had the capacity to measure their ratio of capital expenditure to that of depreciation. They have been preparing for the end of the economic storm by building for the company’s future.
5 Tips To Be Recession-Ready
- Business planning should be continuous and not just an annual event.
During any type of economic climate, companies should not wait for a year to pass if their products or services are going to be profitable. Planning should be in rapid and continuous cycles.
- Use agile structures and processes that can support rapid changes.
Business conditions are rapidly changing. It means that companies should have a flexible tool for their planning. Changes in plans mean changes in the organization’s processes and structures. The processes should be collaborative, time-sensitive, and simple.
- Train and recruit new skills.
Many companies found that a big portion of their most recent revenue has been directly linked to the skills areas that only five years ago, did not exist. Businesses need to update and upgrade their workforce’s skill set to keep up with the rapid changes.
- Empower employees when it comes to decision-making.
Traditional organizations have this
- Managing uncertainty using agile control.
The organization needs to be agile. Unlike what many would think, it won’t create chaos. What it will result in would be opportunities to immediately know if products or services are performing well. By knowing the situation quickly, leaders will be able to make fast decisions that will benefit the business.
Airbnb Bounces Back amidst Covid-19 Pandemic
It comes as no secret that the Covid-19 pandemic has severely affected the tourism industry, including the hotel and accommodation sector. Despite the initial setback, Airbnb’s are slowly starting to rise with the trendy Airbnb nomadic culture work from home individuals are starting.
When the Covid-19 pandemic started, the first industry to take the brink of the economic downfall was the tourism industry. With flight and movement restricted by lockdown protocols, fewer people are checking into hotels and booking at Airbnbs. While the industry initially felt the effects of the lockdown protocols, they are slowly bouncing back with the Airbnb nomad trend.
So what exactly is the Airbnb nomad trend? Because more and more companies are encouraging people to work from home to control the spread of the virus, people are ditching their apartments and are starting to hop from one Airbnb to another as an opportunity to explore the world (within the confines of their Airbnb) while they are working from home.
Working in Style
Take, for example, Tess Pawlisch, who has been working in San Francisco for four years. She can only take a few vacation leaves amidst her busy schedule in her previous office work set-up with her demanding job. However, now that she is working from home, she can balance working from her Airbnb even when she is on a sunny beach in Mexico sipping tropical-flavored shakes. Pawlisch is only of the many individuals who decided to seize the opportunity to “travel” while working from home.
With the initial setback to minimal to zero bookings for Airbnb during the early half of the year, this trend comes at a perfect time for the accommodation giant as Airbnb sales skyrocketed to twice their original sales start of the year. Airbnb’s market value is almost at par with another booking giant, booking.com, with the Bnb having $83.2 billion and booking having $85.6 billion. Airbnb has been doing so well in the past few months in terms of shares and stocks that they even surpassed Marriott hotel, which has a projected $41.7 billion valuation.
Exciting Opportunities Await
The work from home set-up is advantageous for people who are bitten by the wanderlust bug, but it is also advantageous for individuals with families or those who want to be nearer their families during these trying times. For example, Trey Ditto was working in Brooklyn, New York, because of his job. Because his company encouraged him to work from home, he decided to move in with his wife (who was also working from home) and their 2-year-old son when they found a bigger apartment near the upstate portion of New York City for about two months. When they realized this would be the new normal soon, they moved to another Airbnb in Texas to be closer to their families—an opportunity that would not have been available if they were back in the office.
However, hopping from one Airbnb to another is not all luxury and glamor. First, the stress of hauling all your things to settle for a month and then moving to another house the next. It can be extremely exhausting. Second, there will always be the element of surprise. For example, even if the unit’s photos are very enticing (it’s called marketing for a reason), the actual unit may be smaller or more run-down than earlier anticipated and can be quite stressful for picky individuals. Lastly, since the Wi-Fi connection is essential for work from home individuals, not all Airbnb units have the best Wi-Fi access to work with. In fact, the Wi-Fi connection is the number one complaint of individuals who are slowly adapting to this lifestyle.
Holiday Shoppers Want Their Money to Go to Good Businesses
More shoppers are looking to buy local products and support companies that align with their values, like Black Lives Matter and other movements.
A lot of small businesses got hurt when the coronavirus pandemic hit. The death of George Floyd has shed more light on racial inequality, and the result is that almost 60% of consumers are highly likely to shop in local stores or neighborhood shops for the holiday season.
Many US consumers have responded to a survey saying that they are looking to buy locally sourced items this year, and some are looking to support companies that align with their values, as well.
4 out of 10 respondents say that they’re looking to shop from minority-owned stores, and the same amount says that they support retailers that reinforce the Black Live Matter movement.
The pandemic has brought about difficult times for everyone, which is why most consumers are ensuring that the companies they buy from work hard to create a world where they want people to live.
According to Aurora James, spending a dollar somewhere is voting for that item to keep existing, and in this pandemic world, a lot of companies aren’t going to be able to survive anymore, which is why every dollar spent really matters.
Major companies have taken notes and are now supporting small businesses by carrying their products in their store. Lowe’s has started a pitching contest to look for entrepreneurs who stand out and also provided millions of dollars for grants to minority-led businesses and small shops.
James, a Brooklyn-based business owner, says that the pandemic has pushed consumers’ desire to shop local, whether through a major retailer holding products from a local shop or through a mom-and-pop store.
Most holiday shoppers want to give gifts that make them feel good about buying it because they know that they supported a small business and because they chose a gift that is appropriate for the person receiving it.
Now, James is pushing big companies to assist Black-owned businesses because she was upset by the disruption of the pandemic towards these businesses. Aurora James pitched that major companies pitch at least 15% of their shelves for small businesses.
Since the start of that petition, some companies like Sephora, Macy’s, and Rent The Runway have joined the pledge.
The support of consumers towards small businesses will decide if these stores can keep their business alive.
Some shoppers have decided that they will shop from local businesses on Saturday, which people are now calling Small Business Saturday. This shopping event was pitched by American Express and was created to encourage shoppers to buy from their communities.
Knowing how corporate America turns a blind eye towards some of these small businesses, but being sustainable and equitable is really good for businesses, and they’re still the right thing to do.
So when you go shopping for your Christmas gifts, we hope you consider buying from local minority-owned businesses.
Bridal Gown Industry Resilient amidst Covid-19 Pandemic
All’s fair in love and war even during the Covid-19 pandemic. While celebrations and gatherings are growing smaller and smaller as crowd control and social distancing measures become stricter, love still blooms against the struggles that the pandemic is causing.
Even when the world froze with the Covid-19 pandemic, love continues to bloom. This is apparent with the sales in bridal gowns such as that of David’s Bridal, where sales are the same as that of last year. Even if wedding ceremonies are growing smaller with intimate wedding ceremonies, the need for brides to buy a wedding gown is still largely present. Even if the wedding gets postponed, they are still pursuing wedding ceremonies, albeit on a smaller scale.
David’s Bridal Turns It Around
Like any other industry, David’s Bridal was not exempt from the financial onslaught of the ongoing pandemic as it shut down stores, especially during the initial onset of the pandemic. However, with everything going digital, David Bridal decided to turn it around and adapt to the new times by investing in online marketing strategies and started using social media to generate more sales. With its new management, Oaktree Capital Group, they were able to shut down any whisper of bankruptcy and reduced its debt load by more than $400 million!
With everyone using the power of technology, bridal boutiques such as David Bridal decided to go digital to cater to a wider audience. It began offering virtual consultations with their stylists so brides can discuss their dream wedding gown in the confines of their homes. Their app also includes an augmented reality feature so the bride can see up close the type of fabric and beadwork and choose according to their personality and style.
Adapting to the Bride’s Taste
When you hear wedding bells, you will envision a blushing bride in a long white gown. And while that may be true in a more traditional sense, David Bridal recognizes that brides nowadays have to change tastes, and they included a more comprehensive portfolio when it comes to the styles of their wedding dresses. They included little white dresses, jumpsuits, and even separates that will be better suited for an intimate wedding ceremony. Aside from accommodating a more comprehensive portfolio of wedding gown styles, bridal accessories sales are also going through the roof with one very important addition—the face mask, which is usually done in the fabric of the wedding gown to match the bride’s outfit.
Resilient Revenue Growth for the Bridal Industry
In a recent survey by Moody’s Investor Services, results show that brides are spending at an average of $600 per gown—which is the same as what they are usually spending in the past few years, prior to the pandemic. Though sales for prom dresses have significantly lessened, the increase in wedding gown sales, bridesmaid dresses, accessories, and other dresses have grown significantly even with the ongoing pandemic.
With the thriving market in the wedding industry, David Bridal is seizing the moment and setting up a loyalty program of either spending more or recommending other clients to choose David Bridal for all their bridal needs. What’s at stake? It can go from a free wedding bouquet up on a honeymoon trip to Jamaica.
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