Rarely do so many random negative economic factors converge at one time and it is imperative that businesses prepare for a recession or downturn in the economy.
The scary part…
Today we have a bear market on the New York Stock exchange, inflation rates not seen since the 1970s, interest hikes not seen since the early 1990s (and the days of TARP), income inequality at its worst since the Great Depression and fractured American politics leading to a non-functioning Senate and an impotent Congress.
The problems in the United States are exacerbated by the War in Ukraine, food shortages in India, the Middle East and Eastern Europe, more refugees around the world since World War 2, and Autocratic states cracking down on minority populations in China, Pakistan, India, Bangladesh, Burma and elsewhere.
Famine has reared its ugly head in Northeast Africa, Civil War rages in Sub-Saharan Africa and failed states in Venezuela, Somalia, Sudan, Yemen, Syria, Afghanistan and elsewhere continue to blight the world economy.
In the US, we are experiencing droughts in the most valuable agricultural center in the world (California’s central valley) with little to no end in sight
The world is also facing nuclear threats from Russia, China, Iran and North Korea.
Erratic financial markets, COVID surges, changing work-ethics, supply-chain disruption, entitlement overreach, monopolistic behavior by essential businesses and you have a confluence of negative news that will lead the United States and the world into slow-growth, recession and likely lead to a Japan-style lost decade economy for most of the Western World.
What does it mean for you?
So what does this mean for you and your business? Lending will become more stringent, limiting capital expenditures by businesses. This is why you need to prepare for a recession.
Defaults and non-payments will certainly increase (and maybe exponentially…) and insolvency and quasi-insolvency processes will likely become the norm.
Are you ready to balance your business between your paying, loyal customers and management of non-paying customers?
Do you have a plan in place to deal with the upcoming “oh shit” moments that are inevitable in a creaky economy? Most businesses are not ready and most businesses take the “ostrich” approach and ignore the problem until it is too late.
Don’t wait until it is too late. Now, before things really take a downturn, is the time to make sure that your business protocols are sound and that your enforcement mechanisms are up to date, cost effective and easy to manage to prepare for a recession.
The best advice to prepare for a recession in a few easy steps
So what do you need to do?
- Make sure your contracts are current and up to date.
- Are your contracts expired? (it is hard to believe, but many people are operating under business agreements that expired or termed-out years ago and that have never been updated or renewed).
- Are your default provisions clear? Do you know how to notice a default? Is there a cure period? If so, how long? Is it reasonable? Is there a notice by mail, email, carrier pigeon, etc.? Is it technology friendly or does it still require a fax machine?)
- Do you have a dispute resolution process laid out in your agreement? Is it an old brick and mortar solution like JAMS or AAA, or is it an online solution like thinkbrief.com? Does it require robust discovery or is it a more streamlined process? How long does it take and how much does it cost? Brief usually takes less than 45 days to resolve and less than a few thousand dollars where traditional arbitration can take 12 months plus and cost tens of thousands of dollars.
2. Are you in regular contact with your customer or borrower? Who is your regular point of contact? Do they have authority to modify or update your agreement with them? If not, who do you have to contact?
3. Do you have an attorney fees and cost recovery provision in your agreement?
4. Are you able to mediate or try and settle any claim before a legal dispute ensues? For example, Brief has a settlement function that streamlines the mediation process online and asynchronously.
5. Are you able to update your contracts or agreements unilaterally?
Meaning, can you simply advise your client or customer of any updates to your agreement or terms of service as part and parcel of your agreement/contract or do you have to get their affirmative acquiescence to any contract changes? (For example many lines of credit or credit cards simply send notices of their updates to their customers via mail or email).
This is important because you want to update your agreements before there is a dispute so that if you do need to update your arbitration clause or your notice provisions, you have ample time to do so and that update is enforceable.
Don’t wait until it is too late, prepare for a recession now
Being prepared for an economic downturn is important, but it is also one of those things that businesses avoid because it makes them face the prospect that not everything is going to go as planned.
It’s akin to preparing a Last Will and Testament. No one wants to contemplate their own demise and make plans for when they’re gone.
But it is something that needs to be done regardless to avoid probate and to give peace of mind to your loved ones.
Hoping for the best, but planning for the worst is important so that you’re not facing insurmountable costs or challenges for simply trying to get paid what you’re owed
Please feel free to share this message and advice with everyone you know. You will give them the best business advice you can to prepare for a recession and a rocky economy.
Are you ready to recover what you are owed?
Brief has helped small and large businesses across the United States recover debts that were simply not worth the cost of traditional litigation or arbitration if not for online dispute resolution.
With Brief’s market-leading platform, a typical claim will be 80 percent cheaper than traditional arbitration and will typically cost you no more than $1,700.
Brief turns around a typical arbitration claim in 45 days, compared to 410 days in traditional arbitration.
Register now on our online portal. Submitting your claim is simple if a dispute arises, all for a flat upfront fee.
You can also download a free arbitration sample clause to customise to your needs.
Satisfied and repeat participants include electronic commerce sites (Fintech), factors, banks, MCAs, and other lenders.
Brief also handles all types of monetary disputes and declaratory relief actions such as quiet title, coverage claims and warranty claims.
Our screened network of Ejudges spreads across all 50 states, and each case is matched to the jurisdiction and subject matter expertise of the Ejudge.
You can request a demo from our homepage or call one of our arbitration consultants today on tel: +12134443794. Alternatively, drop us an email at [email protected].
Brief is a market-leading online arbitration platform in the United States. Our 100 percent online alternative dispute resolution platform helps businesses protect their contracts and agreements through online arbitration. Follow us on LinkedIn or Facebook for updates and news about online arbitration and more.
*Brief cannot and will not give legal advice on any matters, financial or not.
