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Keeping your head in a recession

posted on Monday, October 06, 2008 10:32 AM

People are starting to feel frightened about the global financial crises. What started as a United States problem has spread to Europe and now looks increasingly like it will affect the whole planet. For social entrepreneurs who are trying to get their business off the ground or grow an existing business, it poses two serious challenges; a) access to finance whether it be from banks, investors, government or foundations will all become much harder, and b) customers who buy products or services will have less cash to do so.


So, how to respond?


Firstly, social entrepreneurs like all businesses will have to become ever more careful in keeping costs under control.


Secondly, try not to expose yourself to new financial risks and reduce where possible, those risks you have.


Thirdly, the need for people to work together has never been greater. Social entrepreneurs should actively start to look for others they can partner with to share costs (premises, staff, equipment, design etc) and work together on delivering projects.


Fourthly, it may be necessary to look afresh at your business model and see how it will have to be adopted to suit the new climate – almost all businesses will have to change in some way as this crises unfolds.


Finally, and perhaps most important, don’t panic. Economies do recover from economic downturns. For the coming months, everyone just needs to be more careful in what they do and how they do it. My Grandfather (who died before I was born) used to say “you should never lose your head when you need it most”.

Comments
Peter Ongera
Monday, October 06, 2008 01:55 PM

Yes.It is time to look at other alternatives like solar energy,wind power,car pooling,telecommuting,outsourcing and so on.

Barry Crisp
Tuesday, October 07, 2008 11:07 AM

I fear we won't feel the true affects of the financial crisis until next year. Indeed 2009 will be a most telling year for many people. Perhaps we should put this in the learning section also Tommy?

Humphrey Mutaasa
Wednesday, October 08, 2008 07:44 AM

Thanks comrades for the debate; I will also have this to say: 1) This is what we lecture and tell business practitioners to have cash flow forecasts, business plans, and SUSTAINABILITY PLANS. now if such a crisis happens like it is now and some donors whose funding has been from devidends earned as shareholders in different organisations, like banks and other companies on the stock exchange, what will organosations which dont have a sustainability plan do? 2) What we dont know migt be what is killing us; speculation is a language on the stock exchange, and this in lay man's language is "if chance falls and..." so as economics cetelis peribas sometimes doesnt happen, things change but people overlook and never want to hear any one saying if it does not happen, what next? so maybe its a political risk for the American government, maybe not. we shall wait but for us in Africa, we are worried of 2009 to 2015 and the mellinium Development Goals. I an speak till tommorow. Humphrey Mutaasa ACODE Foundation Inc Making Africa a better economy

Humphrey Mutaasa
Wednesday, October 08, 2008 07:45 AM

Thanks comrades for the debate; I will also have this to say: 1) This is what we lecture and tell business practitioners to have cash flow forecasts, business plans, and SUSTAINABILITY PLANS. now if such a crisis happens like it is now and some donors whose funding has been from devidends earned as shareholders in different organisations, like banks and other companies on the stock exchange, what will organosations which dont have a sustainability plan do? 2) What we dont know migt be what is killing us; speculation is a language on the stock exchange, and this in lay man's language is "if chance falls and..." so as economics cetelis peribas sometimes doesnt happen, things change but people overlook and never want to hear any one saying if it does not happen, what next? so maybe its a political risk for the American government, maybe not. we shall wait but for us in Africa, we are worried of 2009 to 2015 and the mellinium Development Goals. I an speak till tommorow. Humphrey Mutaasa ACODE Foundation Inc Making Africa a better economy

Humphrey Mutaasa
Wednesday, October 08, 2008 07:47 AM

Sorry for the repeatition my internet in Africa needs a touch...

Tommy Hutchinson
Thursday, October 09, 2008 09:46 AM

Thank you for your interesting comments.

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