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What steps can be taken to become more resilient in these challenging times?

Just when we thought the impact of Covid was behind us, the UK is facing another recession, depending only on performance in the last quarter of 2022. Economic conditions have been affected by the occupation of Ukraine, rising energy costs, inflation and increases to the cost of borrowing. An extended period of economic uncertainty appears to be on the cards as the UK manages its trading relationships following Brexit and faces increasing levels of industrial action in the public sector.

Economic uncertainty may become our new normal but perhaps things are not quite as depressing as they may seem.

“Economic uncertainty may become our new normal but perhaps things are not quite as depressing as they may seem.”

At the risk of brightening up your day, some businesses seem to be adapting well to new or increased levels of risk and cost. Spending time with our clients suggests that the pandemic required many businesses to confront challenges and respond decisively and quickly. Building on this experience, we are constantly impressed by how our clients can now quickly reprioritise, adapt their commercial approach and work together with their stakeholders and others. Economic uncertainty brings opportunities as well as challenges. They are usually just buried more deeply, need to be looked for and require a change of approach.

Common themes in these discussions include how much of the increase in overheads can be passed-on to customers, but many businesses are also open and willing to renegotiate obsolete or outdated arrangements, which are now recognised to be no longer fit for purpose. Everyone is effectively in the same position and there is a willingness to consider alternatives, in terms of funding, managing disputes and commercial relationships more generally. A more flexible approach is being adopted in relation to governance, structures and employees, including recognition and reward.

Inevitably, there is a demand for restructuring and managing change within the workforce as well as defensive spending to protect business goodwill and commercial relationships or reputation. I am now old enough to remember 1991 as well as 2009 (even if I was studying for O’ Levels in 1981). At least so far, what appears to be different is the willingness and speed by which we are adapting to manage the medium and long-term risks caused by economic uncertainty. This often involves re-visiting or rewriting business plans and remodelling finances but also involves the early and prompt resolution of disputes, enabling businesses to use their resources productively, by looking forward and adapting. The most interesting examples include adapting to market conditions and implementing changes using technology or by diversifying into different markets. Taking control promotes confidence and there is still investment going on, as well as consolidation in wider markets as we all plan our commercial future.

There is certainly no easy or short answer to the challenges of managing a business in the current economic climate. At the risk of being positive however, we are taking steps to prepare and adapt, and economic activity is continuing. Our discussions suggest that businesses want to ensure that opportunities are taken as well as risks being managed. Many of our clients are dealing with the uncertain economic future by building in resilience.

At Weightmans, we understand business and how to manage risk, whatever the context or specifics. We can use the law to your commercial advantage. We listen to our clients and can recognise what you really need. We will base our solutions on what is important to you. We are used to having business conversations. We are investing for our own growth and want our clients to succeed.

If you want to have a business conversation with us, you can contact one of the Weightmans partners you already know, or you can contact me directly. We would be pleased to hear from you and to understand your own perspective and experiences. Things are difficult but we understand both the challenges and how others are adapting to unprecedented levels of economic uncertainty.

You will find that we are genuinely interested in how you are adapting to risk and the steps you are taking to become more resilient in the face of challenging market conditions.