According to the doom mongers, the UK is one missed credit card payment away from a recession. According to Bloomberg yesterday:
A UK retail sales index dropped to a 25-year low in July and banks granted the fewest mortgages in at least nine years last month as the economy edged closer to a recession.
But what is a recession?
The definition of a recession is a period of general economic decline. Or, more specifically for the country as a whole, a decline in GDP (gross domestic product) for two or more consecutive quarters.
We can ignore the latter part of that for now. But let's look at this economic decline thing in relation to television.
In the latest IABM figures (PDF), sales of equipment were not as strong so confidence has dipped and prices have ‘softened.'
Back that up with a few recent stories - and these did not take me long to find - and you could paint a picture of ill-health within the services and technology sector.
Administration - Pepper
Liquidation - Noise London
Re-incarnation - Lime/Rocket
Credit trouble - 2D Video Facilities
Merger - Concrete and The Facility
We appear to be in the grip of - or at least staring down the barrel of - a recession.
Another announcement made this week made for interesting reading though. On the surface the news that teleprompter maker Autocue is closing an office, the one that rents rather than sells equipment, looks like another bad news story.
But, is it? It could equally be a smart business decision, one that will lead to lots of good news stories further down the line.
And that leads me to my point. If we are heading for a recession what do we to survive it? Autocue has closed a department that was no longer bringing in the required business, therefore saving on overheads and putting emphasis on other parts of the business.
Seven people will be out of work, and that hurts. But a short-term negative should become a long-term positive as the company will be stronger for it, the rest of the employees will continue to have jobs and customers will continue to have the odd teleprompter or two.
Here are my five suggestions for coping with a recession:
Act early. Look for ways to minimize costs without compromising the business. There are often ways to cut costs and decrease inefficiency.
Avoid taking on any unnecessary debts. Any debts you do have try to reduce and consolidate into an account or loan with a lower interest rate.
Diversify to reflect the changing economic environment.
Keep selling. If you are not making enough revenue, sell more.
Work on your business. Stand back and look at your business and improve it.
My pint is half full. I believe that good things often come from bad. Difficult times can force us to re-evaluate the health of our businesses and our finance. It can make us look for new business avenues, new directions and new ways to cut costs and spending while improving efficiency.
For a while it might hurt but the important thing about a recession, downturn or blip is not to panic but try to make the best of the situation we find ourselves in.