An economic downturn is coming, a recession is imminent and layoffs have begun, most recently in the tech sector. The writing has been on the wall for a year there is no question that the next year or two will suck for the world economy. Publicly traded technology companies have had more than 50% of their values swept away, some as much as 90%. The Nasdaq is now down over (30%) from the peak, S&P 500 is down over (20%), and long-term treasury bonds have lost more than (20%). Such losses indicate that we are most likely in a recession now. The path we are on is very similar to the events of World Wars One and Two. In both cases, we experienced tremendous government spending, supply chain disruption, a big jump in inflation, and finally a recession when the government stimulus ended. During 2020 and 2021 the $10 trillion of “free” money and quantitative easing by our government and the fed provided a temporary boost to homes, stocks, bonds, and buildings.
How do you make lemonade out of these lemons? While I certainly don’t have all the answers, I do know what has worked for others and how the mighty have thrived during these times, historically. You absolutely cannot sit on your hands. A lot of the revenue you’ve experienced in the past two years is a bounce due to COVID, that bounce has ended. The company took care of you during COVID, now it’s your turn to take care of your company.
Here are the top ways companies can prepare themselves.
- Don’t be blind. It’s going to happen and it’s going to affect you. We are in the hiring business, when people don’t hire, we don’t conduct as many background checks. Solicit feedback from you clients and most importantly your senior executives. Where can you cut some fat, save some money and run a meaner and leaner operation.
- Price increases. There, I said it. It’s gonna happen, you may be forced to raise prices on your clients and be prepared for price increases from your vendors. Gas is up, way up, inflation is at historical levels. You can’t get yourself on the right side of the balance sheet without discipline on your margins. Start planning now and be prepared to battle it out with some of your best clients. It’s smart business!
- You have other products in your war chest, you have other products that have entered the screening space, sell them. There is no better way to increase revenue than to go to your existing clients and add revenue. We now have social media screening, continuous monitoring, I9 services….teach your teams how to upsell.
- Acquisitions! No one did it better than Sterling in 2008. The economy was in a massive downturn the largest economic downturn in modern history, no one knew what to do or when it would end. Sterling took it as an opportunity and made several strategic acquisitions that I could argue made them the company they are today. It wasn’t very long before 2008 that Sterling was less than 30 million in revenue, now they’re over 700 million.
- You need sales and marketing. If you are not constantly moving forward and growing your business, it will be very easy to get squashed. It’s imperative that you add new clients; you do that by adding great salespeople. You must continue to try and grow and invest in growth as things slow down.
- Innovate. Are you using all the automation tools available to you on your platform? If not, you need to look at this now. Humans are great but if you are having labor do things that a computer can do better, are you doing the best thing for your organization? Talk to your platform provider or us, there are always ways to do things better.
These are the things you can’t learn at a conference or in a classroom, you learn from experience. We can help you in a multitude of ways but running a clean business with the best people is what we excel at, give us a call. Hope to hear from you soon!
Best
Jason
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