What is Recession Risk? 3 Tips to Prepare

Many businesses and industries are looking at economic forecasts for the United States for late 2022 and early 2023 wearing “recession-ready” glasses. If yours is one of them, it’s important to ensure that you have confidence in your risk management processes to ease the burden of keeping up with economic challenges. 

A recession risk management plan means you can do more than just survive a recession: you can spot opportunities and thrive. Preparing for the unknown can put you leaps and bounds ahead of competitors who are too busy obsessing over the falling sky.

Governance, risk, and compliance (GRC) management will make your business resilient during the best of times — and nearly bulletproof during slowdowns. Learn what recession risk means for your business, plus our three tips to help you tackle recession risk right now.

What is Recession Risk? 

Technically speaking, a recession is a long-term economic decline that lasts at least two financial quarters. During a recession, consumer buying power decreases, and people tend to spend less. 

Reduction in consumer spending creates a domino effect that has a tangible impact on businesses. Your clients may cancel contracts or not spend as much, which could hurt your bottom line if you don’t plan for it. This could mean businesses are less likely to see the returns they were used to pre-recession. 

With recession risk, we look at several factors to indicate that a recession is imminent. Usually, inflation is a good indicator that a recession is coming — and since

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