Generally speaking, economic recession is a period of significant decline in economic activities spread across the economy that lasts more than a few months. Its effect is normally visible in real GDP, real income, employment, Industrial production and wholesale-Retail sales. In economic terms, Recession is a negative growth for two consecutive Quarters. Against this backdrop of harsh economic environment with potential adverse effects on businesses and citizens at large. There are some important practices that can ensure that you survive.Survival in harsh economic environment is possible if certain drastic steps are taken. Some of the steps are listed below;
MAP OUT FINANCIAL PLANS
Many find themselves in financial mess because of the failure to draft out a proper spending plan. If you have a clear vision of what you want to achieve financially, what you want to spend and what you want to save, it is easier to maintain a particular budget and not get carried away by unnecessary spending.BE BUDGET CONSCIOUS
You can as well map out a financial plan but not stick to it. Learn to leave your debit and credit cards at home, and try to use them only for emergencies. Carrying debit and credit cards make it easier for people to make unplanned purchases. POS machines even make it faster, as you can pay conveniently without going to queue at the ATM gallery.While spending, be sure to look for deals and discounts that are comfortable so as to cut spending.
IDENTIFY NECESSITIES
During a period of economic meltdown, the only way to ensure that you and your business survive is to look around and identify items that are very necessary. The best way for your business to survive in harsh economic environments is to ensure that you are providing items that are very necessary to customers. Anything other than that would reduce patronage and the knock effect would be marginal or no profits at all.SEEK CHEAPER ALTERNATIVES
In order to cut down expenses, you would need to identify alternatives to items you regularly use in your business or household which are less expensive to what you usually use. However, you should make sure that the alternatives you identify do not have a negative effect on its intended use. For instance, you identify a less expensive material for your production and the material has a negative effect on the output resulting in significantly lower quality much to the notice of customers. The low quality would be detrimental to your business, leading to negative patronage and sales.AVOID IMPULSE BUYING
Cutting on your purchasing frequency during recession is a major way of curbing spending. This can be achieved by avoiding impulse buying. This is simply buying things you have no prior intention of buying. To avoid this, you should properly have a list of the items you need before you go shopping as this would guide you on what to buy and what not to buy. By this, you go shopping with cash that covers the items in the budget list.CUT DOWN COST
During Hard times, even the government cuts down the budget, so why can’t you do the same? Switch off appliances not in use at Home/office to cut down electricity bills, eat more at home instead of expensive dishes at that restaurant. Do you still invest too much in liabilities like clothing just to look dapper or beautiful to the next person who perhaps do not care about you? Keep less important things out of the budget for now. Another way to ensure that your business survives in harsh economic environment is to look at areas in your operations where you can cut down cost without affecting the product negatively.LIMIT SOCIAL ENGAGEMENT.
Most people spend a fortune on going out, watching movies at cinemas, hanging out with friends and buying impulsively. Steer clear of friends that only drag you out to spend lavishly. Learn to say no to them. If you can find ways to limit the way you go out, you will be saving yourself a great deal of money.RE-PRIORITISE
The first thing you need do to prepare for hard times is to change your priorities. In an economic downturn, our concern needs to switch from luxuries to core needs like food and shelter. We have become extremely spoilt by a host of modern conveniences. In an economic downturn, some of these things will have to be given up.BUY IN BULK
There are hundreds if not thousands of stores that sell various house hold items. Unknown to most people is that buying some of the common items in bulk is much cheaper compared to buying the same items separately. In fact, most of the stores offer discounts to clients who purchase items in wholesale.DO IT YOURSELF
There are some tasks that demand specialized skills and experience, but there are some easy projects that you can do on your own without necessarily hiring an expert. For example, you can work on your garden during the weekends instead of hiring a manual laborer. All you need do is purchase the required tools
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