Recession is defined by economists as two consecutive quarters of negative Gross Domestic Product growth rate in an economy. It is a confirmation that economic activities in a country have contracted. We believe by now, you have been inundated with news of an impending recession and what it could mean for Nigeria and your business.…. But how should small businesses respond to the threat of a recession? Nairametrics hopes to address this question by suggesting a list of things businesses can do to deal with the impending recession.

Review your funding structure

A recession typically starts by ravaging through the balance sheet of companies focusing on the company’s sales, profitability and then cash balances. Your business starts to record a decline in revenue followed by losses and then you start to run out of cash to pay for recurring expenses. This has to be your number one priority as the moment you start to experience cash shortages in your business, then it is clear that recession has caught up with you.

To avoid being in this situation, you will have to immediately review your funding structure. This involves identifying where most of your cash comes from, how much you have in your bank account and how much you owe (debtors plus suppliers). If your business is heavily
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