Fast-rising interest rates and inflation are some of the questions that are bothering business owners because of the possible recession that can be boosted in 2023. Different financial risks have already been happening all over the world. For example, Japan had many restrictions due to the Coronavirus (COVID-19) outbreak and opened its borders only in October, 2022. The lack of tourists brought a lot of losses for the government. Every country had its own struggles to deal with for the last couple of years. Thus, due to the latest economic difficulties, various risks are expected to happen in different industries in both the US and Europe.
That is why, nowadays, it is important for companies to understand where to invest and how to act during this period. Investing in custom software is a very beneficial decision, and it is even possible for you to save money in the process. In this article, we will take a closer look at recession and what are the possible solutions that can save the day.
Recession, Common Concerns, and Its Impact on Business Operations
It is essential to start with the basics, so let’s define what recession is and how it impacts companies. Recession is a significant and persistent change in economic activity. It is characterized by a decline in employment, production, and, as a result, income. It leads to uncertain expectations and delays of large investments and purchases. Such a situation can affect different companies, both large and small.
Therefore, if you are looking with caution at the upcoming year of 2023, you are not the only one. State of European Tech asked founders and VC respondents about the main macro risks that could lead to a slowdown in European Venture Capital activity over the next 5 years. Many of the leading risks highlighted in the survey have already become relevant issues that should be dealt with.
Recession can impact various business factors. First of all, it affects sales, which means that your company may have a few or no orders at all. The demand of your services and products minimizes, and it leads to a drop in sales. You need to be ready that one of your customers may go out of business any time, so their bills will go unpaid.
Your capital is what you also need to look at, because the financial health of your organization may be unstable and uncertain. It is not a surprise that many business owners find this period a good time for investing in custom software and various technologies. Your usual lines of credit will not be available for a long time as well, so it is vital to be cautious with the company’s spending.
Recession also leads to job cuts and decline from hiring new specialists, which is why you need to think through what to do with your current workforce. Maybe it will even be more effective and less costly for you to go for the software development outsourcing services than looking for a new employee. Another negative effect of recession is the drop of product quality. Less employees, slower manufacturing, unpaid bills – it will all affect the quality of your services, so be prepared for that.
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Custom Software as a Life Saver for Business Owners
As we mentioned earlier, most of the companies are making a decision to invest in custom software development. What are the reasons for this blow-up? As a business owner, you need to be sure that you are focusing on the activities that help your firm to grow. And investing in custom software during the recession is a wise decision. Of course, you need to bring all the factors to the table in order to go for the best option. But let’s look at the reasons for investing in custom software that you should consider if you opt for this choice.
Reduced Operating Costs
By hiring a dedicated team of developers, there will be no need to train your in-house team or look for new employees with wide tech expertise. An outsourcing team will include all the specialists your project requires, and you won’t have any reasons to worry about or manage several departments in order to understand what exactly each stakeholder desires. Therefore, you will be able to save some budget and redirect it to other business initiatives and investments.
More Personalized Experience
Better user experience, user-friendly features, compatibility, eye-catching visuals – there is a lot that you need to include in your application to have positive feedback from your clients. When you choose custom software development services, you have an opportunity to develop a personalized system with the required functionality. Thus, it will be easier to please users and not forget about your goals.
Full Control Over Your Product
When you work with a ready-made system, it may be difficult to utilize it due to the restrictions set from the provider side. It is not always possible to use someone’s software fully and modify it to your needs, while a customized solution gives you freedom to do whatever you want. In this case, you will be the one in charge and will be able to go 100%.
Hassle-Free System Integration
Dealing with several service providers is tiresome and is not a cheap option. You can face with architecture differences and separate development techniques by dealing with various vendors. But, when you choose a provider that is able to offer you full-stack development services that will include UI/UX design development, business analysis, and QA and software testing, you will have less issues and better cooperation between the vendor’s team and yours.
Advantage Over Competitors
If during a recession you decide to invest in technology, your company will gain a huge boost in comparison with your rivals. This action will ensure that your investment won’t go in vain, because you will spend your resources on the thing that actually improves the processes of your business and help it to stay afloat, while other companies may struggle with their problems and money loss.
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Hard times are around the corner, so it is up to you to decide how to deal with them. Consider the options you have, the help you may get, and modify your goals to fit in. It will be difficult, and it is a fact you cannot deny. However, you choose your further actions and you define their impact. And investing in custom software is one of the best choices that you can opt for. If you are ready for changes and want to have bespoke software that will enhance your business during a recession, please contact us, and our team will be glad to offer you a personalized solution.