If you’re reading this and you run a company, then the last couple of weeks have been tough. But, in the same breath, it is also true that the best businesses really are built during times of crisis and recession. .

The question is how do you, attempt at least, to learn the lessons of previous downturns (however so caused) and ride this one out in a way that allows you the time, agility and confidence to make the most of the upside that follows?

Most firms suffer during arecession, primarily because demand (and revenue) fall and uncertainty aboutthe future increases. But research shows that there are ways to mitigate thedamage.

Let’s delve into the past and look at the 7 key points that helped businesses large and small survive the last one...

One: There are reasons to be positive

Studies that look back overthe last four recessions suggest that less companies actually fair badlythrough them than you may think. Of the 4,700 looked at in one major deep dive17% of businesses were either acquired, went bust or went to ground.Interestingly 9% flourished and grew revenues through the downturn. How? Theysaw the opportunity.

They weren’t protected fromthe market because they had better products or services. In fact, most of theresilient companies lost nearly as much revenue as industry peers during therecession.

They did it by making point two their number one priority.

Two: Quick decisions matter.

Speak to any seasoned founderor CEO to have steered a business through the last downturn in ‘08 and theywill all tell you that times like these call for quick, decisive action. It is,according to most studies, also the reason most-cited for survival and fastgrowth in recovery.

Among the companies thatstagnated in the aftermath of the Great Recession, “few made contingency plansor thought through alternative scenarios,” according to a Bain report on thebanking crisis. “When the downturn hit, they switched to survival mode, makingdeep cuts and reacting defensively.” Many of the companies that merely limpthrough a recession are slower to recover and never really catch up.

They managed it by reducingoperating costs earlier in the recession cycle, and more deeply. By the first quarter of2008, the most successful companies had already cut operating costs 1% comparedwith the year before, even as their sector year-on-year costs were growing by asimilar amount.

Their willingness to moveearly made them far more likely to successfully weather economic shock. As theeffects of the downturn became more and more apparent, resilient companiesfocused on building more flexibility into their investment-planning andoperations in addition to pursuing continued earnings expansion. By the timethe economy was in full-on recession, they had reduced their debt by more than £1for every £1 of total capital on their balance sheet.

Three: Survival (and a strong cash position) creates opportunity.

The story of Amazon gives you one of the clearest possible examples of the opportunities available post-crash.

In early 2000 the booksellingsite sold almost $700m dollars of bonds to raise some money and ensure itsfinances were secure. In doing so they, unknowingly at the time, preparedthemselves for the dotcom bubble that exploded just a month later. The resultwas that more than half of their competitors disappeared, leaving them with aclear path to global dominance.

It may seem obvious to say ‘don’trun out of money’ but surviving a downturn requires deft financial management.Companies with the highest amount of debt often need to cut deeper and fasterin order to stay afloat, damaging their prospects of recovery when it comes.

Such deep cuts can also impact productivity and ability to fund new investments. Leverage effectively limits companies’ options, forcing their hand and leaving them little room to act opportunistically.

So, don't rely on debt too much for short term gain. Instead manage your P&L and balance sheet carefully and you will prosper long term. ALWAYS allow yourself 6-12 months runway

Four: Don’t panic

Sharp downturns, particularly those like we are now experiencing, can send even the most experienced founders, or business leaders into a tailspin. But the key is not to panic.

There isa big difference between making fast, decisive decisions as a leader andpanicking and we only have to look to the financial markets as a great exampleof this behaviour.

Right now, investors that weathered the last recession probably aren’t even looking at their holdings, as doing so can create an urge to panic sell. This means that they almost certainly miss out on the market rebound.

The sameis true for business leaders. Decisions should be made on the logic that thingsare rarely as bad (or good) as they first appear and that any good businessshould go back to their P&L and reshape it based on the supposition that 50%of revenue may disappear for a period of time.

While thatnumber may not be exact it is a great exercise in understanding your truefinancial position and what you may, or may not, need to do to your fixed costbase in the short term to maintain runway.

This kind of data provides a platform for logical decision making that can then also be communicated quickly and effectively, helping people understand the realities of the tough calls that may have to be made (more on that later).

Good leadership (more about that later) is about transparent, empathetic action. And data is your gold, your compass.

Five: Backed companies fare better

As we saw in the Amazon example, companies with cash reserves are usually the winners in times like these and studies have proved that those backed by private equity, such as our own portfolio businesses, emerge in better shape because capital is easier to access.

It’s part of the reason thatprivate equity money continues to flow, at least once the initial shock of the downturnhas worn off. Businesses that are not solely reliant on staying in businessthrough revenue alone can continue innovating at speed, while those around thempanic and cut costs.

This is particularly true atthe start up end of the funnel as cash burn is usually low and runways are therefore6-12 months+ irrespective of revenue. This very fact creates a (rare)investment opportunity for investors at a time when stock markets remain sovolatile.

Couple this with the fact that EIS relief allows investors to claim back tax and you are investing into super agile, funded businesses that are able to pivot on a whim to the opportunities as they come and present themselves.

Six: Downturns last longer than you expect

Between October 2007 andMarch 2009, stocks plunged 57 percent, down a seemingly bottomless hole. Twelveyears of gains disappeared in 17 months.

Then, just like now,economists were talking about ‘V Shaped’ recoveries but in reality, once alarge economy runs out of steam it can take a long time for it to pick up speedagain.

You should be preparing forthis scenario, right now.

This means creating financialmodels that take account. Yes, absolutely create a plan to manage a rapidrecovery but equally be ready to slog it out for the long haul.

Short term you can look atall kinds of measures to reduce variable costs as much as humanly possible,pause hiring and attempt to lower product costs to ensure your team is ready.

Alongside this it can really pay to create a guerrilla-style special projects group within the organisation to look specifically for the opportunities that will be created. Now more than ever is innovation and agility important.

But, alongside this view youalso need one based on the 50% revenue cut scenario discussed earlier. If thishappens what do you need to do to survive for the next 12 months+? Be ready topress that button at a moment’s notice based on the economic (and in this casepandemic) data readily at hand.

If Italy manages to lowerdaily cases in the short term and get on top of the virus outbreak there thenit will provide the good news needed short term for markets, businesses and individualsto feel like there is light at the end of the tunnel.

If that doesn’t happen in April,then it is time to start considering your Plan B…

Seven: Leadership

Last, but certainly not least, is leadership. Never is it more needed, or important, than in times like these. But what it looks like is actually different to what many believe.

Crisis management calls upon character and empathy - and lots of it. The temptation can be to overly positive, upbeat or confident in these moments but when people are focused on basic needs (food, shelter, paying for things) in the early phases of a crisis this can come across as being disingenuous and disconnected.

Instead, the focus should be on open, honest assessments of the situation, explaining that not all the answers are yet clear but that there is a plan to quickly and effectively find them and share with everyone. Waiting until those facts are available is dangerous as it creates a vacuum, which employees will fill with worst-case scenarios.

Great leaders also keep everyone up to date and mobilize teams by setting clear and simple priorities, empowering individuals and teams to help collectively solve the challenges and answer the questions as a group. It is the responsibility of the ‘boss’ to quickly establish the architecture for that decision making via empowerment and the creation of crisis action teams that can gather around specific challenges quickly and in an agile way.

In short, transparency and honesty are the number one trait and thatshould sit alongside clear empowerment and reorganisation to solve any problemsquickly.

And above all remember; what seems like the end of the world right now will soon be looked back on as an opportunity for personal and professional growth. Uncomfortable as it may be right now hang in there...