Tips to recession proof your business
Get your business in a good position to move forward through tough economic times with these helpful tips and strategies.
While you can't control what's on the economic horizon, you can prepare your business to survive a slowing economy. Use these strategies and tips to get your business ready for a possible recession – keep some money coming in and make your plan to rebuild when conditions improve.
First, know when a recession occurs
Watch for leading indicators that our economy is in recession:
Consumer confidence dwindles
Gross Domestic Product (GDP) falls over two consecutive quarters
Create a financial cushion for your business
During a recession the goal is simple: keep more cash flowing into your business than flowing out. Even a trickle of money will keep the lights on, pay essential employees and cover supplies. Don’t forget to budget in a monthly draw to cover your personal costs.
Reduce cash going out
Review your monthly expenses and trim down as much as you can without harming the business:
Get better rates from suppliers (or find new ones)
Negotiate lower rent with your landlord
Trim payroll hours
Cancel unnecessary subscriptions or monthly fees
Work from home
Delay expensive purchases
Get additional cash
It will be easier to weather a recession if you have a healthy cash reserve or access to additional sources of money. Consider these options:
Sell unused equipment or assets
Get a cash infusion from friends or relatives
Speak to your financial adviser to see if you can afford to lend money to the business
Secure long-term customer deals for a little less money
Approach your financial institution about access to additional credit
Try new ways to sell
Some of the traditional methods you have used to engage prospects may no longer apply. Introduce new selling strategies alongside the ones you know work well.
Find new customers. Try things you may not have done before, such as:
Posting on social media frequently
Trying different social media platforms (for example, Instagram in addition to Facebook)
Making more phone calls
Doing online demos
Running a customer referral campaign
Branching out to sell to customers in a nearby city or town
Sell something new. Introduce a new product, service or benefit. Explore what else your business can offer or add a twist to what you already do well. Work with your suppliers to come with unique offers or deals.
Team up with other businesses to cross-sell to customers. For example, a fitness consultant can promote healthy meals from a local restaurant and vice versa.
Tap into emerging trends. Pivot your business to catch a new trend. Research business and consumer trends online, read leading business publications, pay attention to the news and monitor your competitors to stay on top of what they’re doing.
Increase your online capabilities
Businesses everywhere are doing a lot more online – including selling online, managing remote teams online and moving business operations to the cloud. By moving online, you’ll be able to reach customers around the world and expand your customer base.
Setting up an e-commerce storefront to sell your products or services. Let customers buy from you night and day or set up appointments right in your calendar
Adding a newsletter or email capture on your website
Using marketing automation software to manage email marketing
Polishing up your website and social media platforms with new content, fresh copy and high-quality images
Learning how to use social media more effectively and more often
Moving important company files onto the cloud for easy team collaboration and enhanced security
Lean on your advisors
Your trusted advisors (such as your accountant, lawyer, banker and business mentor) are a tremendous source of help. These are the people who will help you steer your business through tough times. Reach out to them often for expert advice, guidance, support and networking. It also helps to connect with other experienced business owners you may know.
Keep your spirits up and manage stress
Running a business can be stressful during the best of times – so running one during tough times is even more stressful. There will be ups and downs, so take it all in stride and be good to yourself along the way.
Commit to a work schedule and respect your own time off so you can get some exercise, connect with family and friends and just relax.
A recession is a temporary state and, before long, we’ll be in better times. Do what you can now to make sure your business has enough money to move forward, and you’ll be well positioned to take advantage of the inevitable economic upswing.
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