Forgot your password?

Strategies of survival for an individual and small business in a recession

By Edited Jun 15, 2016 0 0

Survival methods for an individual and small business organization

Jobs and investment opportunities

In a recession, other people lose their jobs than you. However, in a depression, you and others lose jobs. if a recession is anticipated, average consumer worries about how it negatively affect them and how they can cope with these negative effects. The following are some of the effects of recession and how to cope with them.

Negative impact of recession on borrowing and credit availability and how to cope with it.

In a recession banks will be less reluctant to grant loans to people and businesses. This is now a problem due to the credit crisis as it affects  availability of loans itself. To manage debts in these circumstances, one must not borrow excessively and must combine their existing debts in to lower interest rate bearing accounts.

Recession and its impact on interest rate and reduced mortgage repayments

In recession, the interest rate is most likely  lower. This enables people and businesses to save on mortgage repayments. This gives some savings in a crucial time to cope against job losses, if that occurs.

Recession and its impact on unemployment and how to cope with unemployment


Recession is an economic condition, where the rate of unemployment increases to a high level compared to the  level of unemployment at normal economic activity for a country.  As the output is decreased, the demand for labor is also reduced and this created unemployment is some sectors worse than others. In other words, the  impact of recession on employment is  not the same for all sectors of an economy and unemployment is concentrated in some sectors.  For example, the recession may affect finance and housing market than agriculture or manufacturing sector.

To cope with possible unemployment if you work in a sector where it affects your possibility of losing your job, think of alternatives, such as online work or online business opportunities. As well,  if you think you may lose your job plan to take unemployment insurance,  if you don't have it at the present moment in time.  The future unemployment may occur or not occur, so don't worry too much about it.  The best possible solution is, to look for other work opportunities and learn new skills, where there is a high demand for labor. For example,  you may learn information technology skills or electronics where there is high demand for this type of labor in most industries.

Recession and its impact on falling profitability of business and how a small business can cope with it

If one is operating a small business recession may affect your business adversely because of falling rate of profit. It may also affect the survival of business if it is operating in a sector which is severely affected by it.  To cope with such a situation, a small business can look for cutting costs which do not compromising the business. There is always waste in any business and this gives an opportunity to cut cost and improve efficiency. Some economists think that recession are good as it gives a business to increase the efficiency of business and benefits the economy as well as it can improve productivity of the economy.  The small business also can consider whether it has possibilities to diversify if recession is affecting its rate of profit.  For example, it can add some new lines of business which attracts frugal customers as recession affects consumers buying behaviour.  In addition, the fall in profit is cyclical. As this is the case, plan to borrow at lower cost  for the difficult years.

Recession and its impact on Stock Market and how to secure profitable investment in a recession

In a recession, normally there is a chance the stock market may cut in value due to falling profits and low dividends. If this is the case, look for diversifying the portfolio or invest in commodities like gold or other commodities which may do well even in a recession.  In recession, the stock market reduces in value.  It anticipates a recession and it may not fall in value during recession.

Recession and its impact on consumer confidence and how to cope with it

The worst impact of recession is its negative impact on consumer confidence as consumers become more uncertain about the future. However, do not depend on media to judge consumer confidence as they mostly exaggerate the situation by sensational news.  To cope with this situation, be calm about it and make the best out of the situation. If you panic, you may end up worse than keeping a calm mind about consumer confidence.


As discussed above, if a person or small business can adopt these strategies they can cope with the negative consequences of recession and take advantage of the positive consequences of recession and can survive and cope well in recession as well they may become more competitive and can grow after the recession is over.



Add a new comment - No HTML
You must be logged in and verified to post a comment. Please log in or sign up to comment.

Explore InfoBarrel

Auto Business & Money Entertainment Environment Health History Home & Garden InfoBarrel University Lifestyle Sports Technology Travel & Places
© Copyright 2008 - 2016 by Hinzie Media Inc. Terms of Service Privacy Policy XML Sitemap

Follow IB Business & Money