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“I’ve heard there’s going to be a recession, I’ve decided not to participate.”
This quote by—who else?—my guy, Walt Disney, has been on my mind for the last several weeks.
Based on the evidence I’ve seen to date, my assumption is that recession is inevitable. There are questions about the economy we can’t answer: When will we feel the effects? How long will it last? What actions will the government take? How will my investments be impacted?
Then, there’s the most important question, the one you can control: What am I going to do about it?
This quote by Disney isn’t about pretending recession isn’t happening. It’s not about wearing the kind of rose-colored glasses that distort your ability to see things for what they are.
It’s about separating the macro from the micro. The country may be in a recession, and on a macro scale, that may have an impact on your business.
But you don’t have to roll over and accept whatever comes without a fight. Recession hurts many companies, it’s true. But it doesn’t have to wreck yours.
A few questions for leadership teams to ponder as you think about preparing for a recession:
How can we leverage ourselves in this economy?
What is our strategy for this time? How do our financial goals need to change (if at all)?
What matters to us? Profitability, employee retention, customer retention, something else?
What do we need to do to achieve our goals?
It’s crucial that as you think through these questions, the answers become part of your recession planning. When crisis strikes, you’ll react emotionally.
You need the plan you put together when you were more level-headed to guide you in the right direction.
In my commercial painting company, for example, we’ve already done a good chunk of this planning.
We’re pursuing smaller contracts that are slightly downmarket from our usual customer base.
We’re putting more effort into government work, a stopgap to help us meet revenue goals.
And we’re watching expenses—not cutting them yet—so that we have the ability to take quick action there if necessary.
A CEO should not do this planning alone. Lean heavily on your finance team to model out scenarios and give you the facts and forecasts to justify (or not) your gut instincts.