Nearly half of the survey respondents to Avenue M’s quick poll have taken some action.
In a quick poll conducted by Avenue M in early August 2022 with 19 CEO/Association Executives, 47% indicated their organizations have begun to prepare for a potential recession. Some executives are factoring the recession into their budget planning process, while others have started scenario modeling around major revenue lines so that they can make adjustments if they do not hit revenue goals. One executive shared they have looked at ways to reduce expenses and instituted a hiring freeze. (Click HERE to participate in future polls.)
To help your organization prepare for a potential recession, consider the following actions:
- Set aside a few hours at your next board or staff meeting to discuss what would happen in a worst-case scenario, current case (nothing changes), and best-case scenario as it relates to the economic, social, political, technological, and regulatory environment. Next, determine how your organization can thrive in each scenario. Look for common threads.
- Could you create product extensions that would increase sales? Identify program, product, or service lines that are profitable, unique, and/or essential to your members’ success.
- Are there adjacent markets you could easily serve with existing programs or products or with minor modifications? Do these audiences have unmet needs, or have they been ignored by other service providers in the past?
- Could you expand your customer base (instead of your membership) during a recession?
Click HERE to participate in future polls.
Want to learn more? Read our quick summary of the following articles and click the links below.
- Providing financial oversight is an important and relatively clear part of any functional association board. Members look at budgets, financial statements, and audits but must also figure out how to use that data to help the organization improve.
- Create a board culture that promotes financial literacy, but consider adding non-traditional members to a finance committee who can reveal new angles you might not have considered.
- Look for profit wherever it can be generated. Ensure your association’s activities yield more profit than they consume.
- Don’t just focus on your current financial status or the financial status of the past. Be sure to look towards the future.
- With the current rate of inflation, associations need to be careful about how much of their reserves are placed in cash or other short-term investments.
- Consider rebalancing investment allocations if inflation reduces the purchasing power of members.
- Hiring and retaining workers is a concern for employers as many are not seeing enough interest or potential candidates to fill open positions.
- Workers are concerned their paychecks aren’t enough to make ends meet, especially considering current inflation.
- Resist the urge to cut the marketing budget during a recession. Marketing contributes to an organization’s success even when the economy is shaky.
- Make sure everyone is on the same page, especially shareholders. Don’t be afraid to try new tactics, especially with a dedicated team working towards marketing your association. If one tactic isn’t working, don’t be afraid to try something new.
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Sheri Jacobs, FASAE, CAE, President & CEO
Jillian Getter, Intern
(Image: Sheri Jacobs, FASAE, CAE)