Preparing for a WW3 Economic Downturn

Let’s not sugar-coat it, things really look grim right now. We are talking about a potential scenario where superpowers collide which might throw all of us into an economic downturn. Currencies wobble like jelly, and your business plans go obsolete faster than your current smart phone!

But here’s the thing, downturns no matter how dramatic still follow patterns. And if you understand those patterns, you (and your business) might just survive. This will put you in a position better than everyone else refreshing their TikTok or Instagram news feed. So, with the worst potentially yet to come, it is time now for us to consider whether or not it is time for our business to…

Cut costs? Duh.

The first (and most obvious) thing you need to consider is cutting costs and no, that does not mean slashing everything down randomly. Instead figure out and prioritize which needs to go first. Cut non-essential vanity expenses (that new PC can wait!), preserve revenue-generating functions ie; machinery and other things that help generate income and of course, protect the core team if your business has staff.

By doing this, you would be removing redundant processes, reduce overheads and focus on only the core essentials. This ensures your business continues to thrive and provide its service even during a downturn. A good rule to follow is, “if it does not help you by making or saving money, take it out!”.

For example, during covid, I was part of the unfortunate few who had to be let go due to providing redundant services. I was working as an experience specialist for a travel company. Naturally, when the experiences could no longer be enjoyed I was let go by the company. Tragic as it was, now in 2026 the company still stands and is back to its usual operational capacity!

Pivot?

During a downturn, consider diversifying the business as well, find new customer segments and figure out new revenue streams.

We at SH Advisory are accountants, so we do firmly believe that despite any difficult scenario the world would always need an accountant (right? RIGHT?). However, that still does not change the fact that putting all your eggs in one economic basket is not a good idea.

The business will need to adapt and evolve during those times, some suggestions include introducing a tiered service offerings to attract different market segments or pursue a smaller and diversified client base, because remember its not just YOUR business that is affected, its everyone.

For example, during the global covid pandemic, Air Asia founded a restaurant called Santan. This was their way of diversifying their business revenue during a period where the travel industry took a huge hit. Many other airlines such as Singapore Airlines also pivoted by launching their own airline themed dining experiences. Grounded planes turned into dining areas while the option to takeaway cabin food was also provided.

Network!

Lastly, strengthen your business relationships with your suppliers, customers and even employees. Much like covid what happened during covid, it’s important for businesses to be on good terms with their stakeholders. Suppliers are more willing to extend terms or give discounts for purchases, customers will more likely seek your business for a product or service and staff will stay loyal when things get extra dicey!

Prioritising customer relationships, removing services that you won’t be needing, building bridges, laying the foundations for the recovery in the future and many others are some of the things you can do right now to prepare for a potential economic downturn.

For example, during covid what my previous employer did to maximise the business retails sales was to tap into her contacts in the e-commerce platforms. This allowed her to best leverage the situation by negotiating campaign priority banners during big sales months and even platform exclusive vouchers. This helped push her product sales better when compared to other small businesses which did not have the advantage of knowing people working in the platform.

Are you prepared?

At the end of the day its all about understanding your market, undertaking risks and being adaptable. Make every decision deliberate and lean. No matter how bad the situation gets they will pass eventually. The real question is whether your business will still be standing when that happens.

You don’t prepare for extreme downturns by predicting them perfectly. You prepare by becoming flexible enough to adapt and strategic enough to survive. Regardless of what is to come, high or low it doesn’t hurt to prepare an umbrella before a coming storm!