{"id":1981,"date":"2023-06-17T05:25:08","date_gmt":"2023-06-17T09:25:08","guid":{"rendered":"https:\/\/www.saudercpa.com\/blog\/?p=1981"},"modified":"2023-06-17T07:32:23","modified_gmt":"2023-06-17T11:32:23","slug":"how-to-survive-a-recession-and-thrive-afterward","status":"publish","type":"post","link":"https:\/\/www.saudercpa.com\/blog\/2023\/06\/17\/how-to-survive-a-recession-and-thrive-afterward\/","title":{"rendered":"How to Survive a Recession and Thrive Afterward"},"content":{"rendered":"<p><em>Preface: All who have accomplished great things have had a great aim, have fixed their gaze on a goal which was high, one which seemed sometimes impossible. &#8212; Orison Swett Marden<\/em><\/p>\n<p><strong>How to Survive a Recession and Thrive Afterward<\/strong><\/p>\n<p>&#8230;&#8230;&#8230;&#8230;..In their 2010 HBR article <a href=\"https:\/\/hbr.org\/2010\/03\/roaring-out-of-recession\" target=\"_blank\" rel=\"noopener noreferrer\">\u201cRoaring Out of Recession,\u201d<\/a> Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen found that during the recessions of 1980, 1990, and 2000, 17% of the 4,700 public companies they studied fared particularly badly: They went bankrupt, went private, or were acquired. But just as striking, <strong>9% of the companies didn\u2019t simply recover in the three years after a recession\u2014they flourished, outperforming competitors by at least 10% in sales and profits growth.<\/strong> A more recent analysis by Bain using data from the Great Recession reinforced that finding. The top 10% of companies in Bain\u2019s analysis saw their earnings climb steadily throughout the period and continue to rise afterward. A third study, by McKinsey, found similar results&#8230;&#8230;&#8230;&#8230;.<\/p>\n<p>&#8230;&#8230;.Companies with high levels of debt are especially vulnerable during a recession, studies show. &#8230;&#8230;. Overall, the more housing prices declined, the more consumer demand fell, driving increased business closures and higher unemployment. But the researchers found that this effect was most pronounced among companies with the highest levels of debt. They divided up companies on the basis of whether they became more or less leveraged in the run-up to the recession, as measured by the change in their debt-to-assets ratio. The vast majority of businesses that shuttered because of falling demand were highly leveraged&#8230;&#8230;<a href=\"https:\/\/hbr.org\/2019\/05\/how-to-survive-a-recession-and-thrive-afterward\">https:\/\/hbr.org\/2019\/05\/how-to-survive-a-recession-and-thrive-afterward<\/a><\/p>\n<h4 class=\"promo-title\">THIS ARTICLE ALSO APPEARS IN:<\/h4>\n<div class=\"promo-contents\">\n<ul>\n<li>\n<div class=\"overflow-auto\">\n<figure class=\"left product-thumb\"><img decoding=\"async\" src=\"https:\/\/hbr.org\/resources\/images\/article_assets\/2019\/08\/10294E_500.png\" \/><\/figure>\n<div class=\"product-thumb-margin\">\n<h6 class=\"hed mbs\"><a href=\"https:\/\/hbr.org\/product\/hbr-s-10-must-reads-on-managing-in-a-downturn-with-bonus-article-reigniting-growth-by-chris-zook-and-james-allen\/an\/10294E-KND-ENG?referral=02559\">HBR\u2019s 10 Must Reads on Managing in a Downturn<\/a><\/h6>\n<div class=\"stream-item-info\">\u201cThe more debt you have, the more cash you need to make your interest and principal payment,\u201d Mueller explains. When a recession hits and less cash is coming in the door, \u201cit puts you at risk of defaulting.\u201d To keep up with payments, companies with more debt are forced to cut costs more aggressively, often through layoffs. These deep cuts can impair their productivity and ability to fund new investments. Leverage effectively limits companies\u2019 options, forcing their hand and leaving them little room to act opportunistically.<\/div>\n<\/div>\n<\/div>\n<\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Preface: All who have accomplished great things have had a great aim, have fixed their gaze on a goal which was high, one which seemed sometimes impossible. &#8212; Orison Swett Marden How to Survive a Recession and Thrive Afterward &#8230;&#8230;&#8230;&#8230;..In their 2010 HBR article \u201cRoaring Out of Recession,\u201d Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen &hellip; <a href=\"https:\/\/www.saudercpa.com\/blog\/2023\/06\/17\/how-to-survive-a-recession-and-thrive-afterward\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;How to Survive a Recession and Thrive Afterward&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/1981"}],"collection":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/comments?post=1981"}],"version-history":[{"count":4,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/1981\/revisions"}],"predecessor-version":[{"id":1986,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/1981\/revisions\/1986"}],"wp:attachment":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/media?parent=1981"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/categories?post=1981"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/tags?post=1981"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}