Are you worried about an imminent recession and its probable effects on your business? Here’s my experience of how I dealt with the Great Recession of 2008 and kept my business running.
“You’ve got to trust your instincts
And let go of regret
You’ve got to bet on yourself now star
‘Cause that’s your best bet.”
These lyrics on 311’s “All Mixed Up” (1995) still ring true today. Over the last few months, as the equity markets have turned shaky, the song brings back a lot of memories. It’s been 11 years since the Great Recession of 2008, and I should trust my instincts. If there’s a recession coming again, I know how to diversify my assets and guard my back. I am better equipped at handling any financial emergency and letting go of my regrets. So, here’s my inspiring story about how I overcame the challenges of global recession and emerged stronger.
I was only 25 years old. In 2006, together with five of my colleagues, we founded the Brodos Recruitment Agency – our dream company. We were ambitious, hardworking and optimistic about the future. Within two years, I was managing a team of 72 employees and our business was growing rapidly.
Three months later, the world’s stock markets fell and the effects were devastating. Magna Traders dropped by 26% in eight hours, while the Imperial Home Appliances fell a catastrophic 60%. Several other companies listed on the Toronto Stock Exchange vanished overnight.
My biggest fear was coming true. I had mortgaged my house to start the business, and I had encouraged five of my co-workers to leave their jobs and join me in starting the company. And now, I could see the economy failing and our business falling apart, ruining all our dreams. Fortunately, it did not. We changed our business strategies and made some drastic moves to survive the major economic downturn. What were those changes? Let me share them with you.
We reduced cash outflow
Expenses are an inevitable part of a business. But, during tough economic times, it’s hard to keep the cash flowing in. When expenses are greater than profits, your business incurs loss. Keeping this in mind, we started working on cash outflow.