As central banks around the world have ratcheted up interest rates in an attempt to curb rampant inflation (to little effect in many cases), a global recession has gone from being likely to a near certainty. The UK hasn’t been spared, with consultancy EY predicting that the economy will be in recession until at least the Summer of 2023.

While some of the measures announced in Chancellor Jeremy Hunt’s Autumn budget mean that the recession likely won’t be as deep as some had initially feared, it’s still concerning for businesses. Bear in mind that the UK economy has consistently lagged behind that of other developed nations. While its gross domestic product (GDP) has shrunk by 0.4% since 2019, other countries within the Organisation for Economic Co-operation and Development (OECD) have grown by an average of 3.7%.

Amongst the G-7 meanwhile, the UK is the only economy to have shown a decline in that period. Factor in the worst cost of living crisis in decades and an energy price shock that the government can only provide protection from for so long and you have an environment which hardly seems conducive to healthy business growth.

Despite all of those very serious headwinds, however, the next few months don’t have to be a period of doom and gloom for entrepreneurs. With the right approach and a little bit of savvy, they can grab the opportunities presented by the situation to grow and innovate in ways that big businesses simply can’t.

Learning from history

There is, remember, a strong history of disruptive and innovative companies being founded during tough economic times. Many people know that the likes of Airbnb, Instagram, Slack, and WhatsApp were founded in the aftermath of the 2008 Financial Crisis, for example. But the phenomenon actually stretches much further back than that.

Microsoft, for instance, was founded in 1975. At the time, an oil embargo by the Organisation of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia saw fuel prices rise by 300% in a matter of months. While Gates and co-founder Paull Allen were fortunate enough to have the right backing and resources to ensure Microsoft’s success, it would’ve been all too easy to go down a less risky path. Gaming giant Electronic Arts, meanwhile, was founded in 1982, in the midst of what was then the worst economic downturn since the Great Depression.

While the circumstances leading up to the current recession may be unique in some respects, entrepreneurs can take heart from knowing what’s possible in the midst of a recession.

Taking practical steps

In order to maximise those opportunities, however, entrepreneurs must take the necessary practical steps.

One of the first, and most important things is to look for ways to maximise efficiency. The best way for entrepreneurs to do that is to focus on what they do well. Oftentimes, it's easy for founders in particular to panic and try to produce something new to get ahead of the game. But this is a gamble, that frequently doesn’t pay off. While there is an element of risk in everything an entrepreneur does, it’s a gamble not worth taking. Entrepreneurs should instead focus on tuning up their products or services to the point where they’re running optimally.

Another important step entrepreneurs can take during this difficult time is to communicate with their customers. The recession will affect businesses and consumers alike. While it is without question a difficult time, it does provide an opportunity to come together through shared experiences. A sense of community will be vital to any business keeping its customer base.

Another opportunity that will come is in recruitment. Over the past couple of years, many UK entrepreneurs have had to deal with a tight labour market. As the recession bites, large organisations in particular will look to rationalise their payrolls. While that’s undoubtedly unfortunate for those affected, it does present an opportunity for smaller, leaner companies to pick up talent that wouldn’t otherwise be available.

Those characteristics also make it easier for entrepreneur-led companies to grab other opportunities when it comes to things like creating new positions, getting bigger premises, negotiating better deals with suppliers and making their businesses more agile.

Acknowledge uncertainty, find opportunity

Ultimately then, entrepreneurs are best served by taking an approach which acknowledges the uncertainty that will prevail over the coming months but which also enables them to grab the opportunities that will also be present. It’s an approach that isn’t always easy to master, but those that get it right will be well-positioned for future success.

Sid Jashnani is EO London Board Member and Founder of Trustmetrics.io