Given the current economic climate, a recession could be ahead, causing even more havoc for small business owners. So, we have asked the CarolRoth.com contributor network of business owners, experts, advisors and entrepreneurs to share their best tips to help make small businesses recession-proof and be able to weather an economic downturn. Their answers are presented below, in no particular order.
You may notice some similar ideas listed, but I kept them separate, as something in the way one is framed may resonate differently with you.
1. Take Control of Your Cash Flow
In order to recession-proof your small business, it is crucial that you take control of your cash flow. This means working to ensure that you have enough revenue coming in to meet your ongoing expenses, while also setting aside money in the event of an emergency. For example, you may need to find new sources of revenue, such as by offering additional services or expanding into new areas. You may also need to cut back on unnecessary expenses and be more strategic about pricing and budgeting.
2. Offer a Subscription Option
Consider different pricing models. People usually spend less during a recession. Evaluate your product and see if you can cut costs. One way to do this is through a subscription model. We offer 15% off plus free shipping to our subscribers. A subscription model also encourages customer loyalty and retention, which is crucial during an economic slump.
Melanie Bedwell of OLIPOP
3. Redefine the Need
Recession or not, a need will always be a need. In broad terms, a need is anything that helps people to be effective. Small businesses can weather economic downturns by restructuring the needs they offer. Does the product or service help people to boost their spirits to show up effectively in life? Does the product or service help people to maximize their time? Those are needs that step outside of traditional definitions and help to anchor small businesses throughout all economic seasons.
4. Maintaining Strategic Alliance
New markets, ideas, and clients can all be gained through strategic alliances. An influencer or another business can be a good source of partnership. Other ways of collaborating with other companies include mergers and acquisitions.
Strategic partnerships were used by 10% of small businesses that survived the Great Recession in a recent poll. According to me, the key to forming these collaborations is choosing partners that have the correct basic principles and developing honest interactions.
5. Don't Scale Back on Marketing
While some businesses may think they should scale back on their marketing during a recession, that is not the case. Instead, companies need to stay top-of-mind with their customers during these periods. Ways to do this include consistent email marketing, regularly updated blog, retargeting ads, consistent social posts, and making sure your website is up to date with any news, events, deals, etc.
6. Turn Them into Raving Fans
How do you create a recession-proof business? By turning your customers or clients into raving fans. By continually providing them with products or services that so exceed their reasonable expectations for quality and value that they can't imagine running their businesses without your irreplaceable support.
And how do you do that? By under-promising and over-delivering, by treating them the way they want you to treat them and by saying 'thank you' in memorable ways that support your brand.
7. Care About Your Clients
Seriously, you need to care about your clients. You need to be passionate about helping them succeed and enabling them to shine. Giving them the tools they need to not only be better off, but realize that it could not have happened without you.
Everyone says that "customers are #1" but very few companies can prove it. Very few of them have customers that rave about them. That recommend them and will not go anywhere else.
Your clients will take care of you because you take care of them.
8. Stay Lean and Flexible
For your business to withstand a recession, you must keep a flexible mindset. Don’t let tradition or ego anchor you to old strategies when the ability to quickly pivot could give you an advantage over slower-moving organizations.
Also, seek flexibility from clients and vendors. Renegotiate contracts for more favorable terms that could improve cash flow. Jettison luxuries like redundant tools that made sense in more flush times yet are no longer necessary for successful business operations.
9. Boost Customer Lifetime Value
Nurture your existing customers by building genuine relationships with them and ensuring their satisfaction. It will help increase your customer lifetime value, which is a good indicator of long-term viability and financial stability. When you have a high CLV, it means that you’ll have recurring revenues from your current customers even during recessions, and you’ve built brand loyalty. Not only will they continue to purchase from you, but they’ll also tell others about your brand.
10. Financial Stability Matters
That might seem simple, but any company with financial stability should be able to weather a turn down. 2020 hit me hard. But good financial planning, long term clients, and a strong but slow pivot weathered me through. I am now financially stronger because of it. Fiscal responsibility matters.
11. Be Unique & Keep Overhead Low!
It is heartbreaking to see so many businesses struggling. The best thing you can do to survive a difficult business environment is to make your offering be as unique as possible. Whatever your product or service is, have a twist that makes it unique and different and ideally something that can attract PR. Also, this is really a time to keep overhead as low as possible. If you can work from home, great as that will save so much, and remember outsourcing is the great equalizer!
12. Be in Your Creditors Good Book
If you don't have to, don't put off making payments to your debtors. You may imagine that delaying payments to your creditors would provide you with more money in the bank. However, if money is really tight, this strategy might backfire. Paying your debts on time and maintaining a good relationship with your creditors is preferable. If you face a financial crisis in the future, the goodwill that accrues by paying your debts on time now will help you negotiate better terms with your creditors.
13. Keep Existing Customers Happy
During a recession, your existing clients will be one of your most precious assets, so treat them well. Look for low-cost strategies to improve customer service and stay in touch with them. When it comes to cutting costs, even your most loyal clients are searching for ways to save money. As a result, you don't want to provide any potential customers a cause to seek elsewhere.
14. Do Not Scrimp on Advertising
Confidence in the economy will plummet amid a long-term slump. Finding new clients might be difficult as a result. When you're trying to save money, don't drastically reduce your marketing budget. Instead of focusing on how to attract new clients, you should consider how to broaden your marketing efforts. You'll need more marketing in a recession, not less, if you want to attract the same amount of new clients as before.
15. Cut Expenses by a Third
When you can't pay your suppliers, don't put it off any longer. Analyze your finances right now to see if you can find any areas of opportunity for cost reduction. As soon as you decide to reduce back, it may take some time before you see any results. In some contracts, for instance, there may be notice periods. Because you have credit terms with your suppliers, cutting expenses may not have an immediate impact on your cash flow.
Benjamin Stenson of Norsemen
16. Bank Up on Emergency Funds
Having enough emergency funds that can sustain your business for six months to one year is one technique to make your company recession-proof. It will allow the company to continuously operate to generate profit while overcoming the recession. When you have enough emergency funds, your operations will still be normal, plus you can sustain your customer's demands and employees' needs at the same time.
Dr. Prav Solanki of Prav.com
17. Focus On Partnerships
Never forget that we're all in this together—other businesses are trying to weather the storms of inflation just like you are. Build partnerships for cross-promotion, sales opportunities, and even recruitment events to boost the power of your business efforts. You'll find expert advice and connect with new opportunities that would otherwise go overlooked. Remember that we're more than the sum of our parts in these partnerships, and always be wiling to give as much as you take.
18. How to Prepare for Disaster
The best way to prepare for a disaster is to have a backup plan. For instance, if you are concerned your target audience won't be able to afford your prices during a recession, have a second choice for a target audience. Also, you can consider starting a loyalty program so your customers are motivated to continue purchasing from you even during a recession.
19. Automate Your Business
Applying technology to your business through automation can make it recession-proof. For example, like the pandemic, everyone was not allowed to operate on-site, thus preventing non-automated companies from performing their daily operations. On the other hand, if your business is fully automated, you can access everything, every time, anywhere. In that case, no operations will be hampered, and there will be a continuous flow of income.
20. Reassess Your Expenses
Delete those expenses that serve you no purpose. If possible, find a supplier that offers the same quality but lower price. In that case, the excess money can be an additional source of funds during a recession. After all, every penny is vital during the recession because money is always in an outward flow, making it harder to be a more profitable business.
21. Improving Customer Retention
Seeing as how customer satisfaction is the defining factor for the success of any organization, providing an exemplary customer experience is a no-brainer. Regardless of what you're up against, your business will always be future-proofed if your clients are loyal to your services and keep returning to you, time and again. However, turning this into an achievable reality demands taking a long hard look at your current customer retention strategies and identifying areas for improvement.
22. Diversify Your Revenue Streams
Having a single revenue stream is the equivalent of putting all your eggs in one basket — it simply isn't going to sustain your business when the going gets tough. A better approach is monetizing your business in multiple ways and diversifying your revenue streams as a result. For some businesses, this could be in the form of ad revenue, introducing a subscription program for your loyal customers, or even consultation services.
23. Establish Strong Relationships
In an economic downturn, relationships become even more important. If you need to defer a rent payment or pay a vendor a little longer, it will be easier if you have trusting relationships in place. You should cultivate relationships before a crisis hits to ask for help when you need it. Relationships with your customers are important. Solidifying relationships during good times will help you keep them when times are tough. Ultimately, people work with the businesses that they know and trust.
24. Beat Your Competitors
The recession won't affect all companies in your industry. Be the one that does best. To get an edge on your competitors, you should conduct research. In what areas is your competitor outperforming you, and what can you do to keep up? Research now to save your business later. Develop robust strategies for your business and hone them until they become second nature. Provide products or services they don't have. It will help your company stand out from your competitors during an economic turndown.
25. A Crisis Management Plan
Disruptions and challenges are an inevitable part of business, but that shouldn't stop you from having contingency plans in place. If anything, it should motivate you to think hard and foresee potential problems. This could be anything from unexpected losses to losing out on employees and even having to close operations altogether.
Once you've identified everything that could go wrong, it's time to build a plan like creating an emergency fund or retraining employees for new roles.
26. Innovate New Products
Irrespective of the lineup of products and services you currently offer, add to the list some essential items that you know will keep selling even during an economic downturn. When the going is good, these offerings may not add a lot to your profits or may not even offer great brand mileage. But when a recession hits, these are the products and services that will provide stability to your financial resources and help you keep your organization afloat.
27. Invest in Relationships
Our tip to recession-proofing a small business is to invest in the client relationships you currently have. Instead of constantly hunting for new leads and customers, you should focus on building stronger relationships with those you have. If your clients trust you and know the value of your services, they will be more forgiving in case of a needed price increase. Happy customers will also act as ambassadors for your brand and help spread the positive word about your business to help it grow.
28. Nurture Your Clients
During a recession, consumers tighten up their budgets, leaving them less likely to try out new products and risk the unknown. You need to build strong retention-focused marketing strategies to nurture your existing relationships. One of the best ways to reach those consumers is by building a strong email campaign and automating post-purchase emails to check in on product satisfaction. Blast out new releases and discount codes to your subscribers to entice them to stick with you.
James Diel of Textel
29. Stay on Top of Payables
To recession-proof your business, you need to build a stable business portfolio, increasing cash holdings and diversifying your assets. You’ll also fare better by “paying as you go” so that your accounts payable don’t grow out of control as your revenue drops. Tie your expenses to their matching sales and pay the bills you incur within the same period to keep your business on solid footing to meet a recession without mounting debt.
30. Have a Flexible Plan
The best laid plans often go awry, so it's important to have a contingency plan in place for dealing with risks that materialize. That doesn't mean you need a detailed plan for every possible risk — rather, you need to have a process in place for quickly identifying and responding to new risks as they arise. And that process should be flexible enough to accommodate the constantly changing landscape of risk.
31. Try "Doom Planning"
Recession-proof your business with a little “doom planning.” The future of business is always unknown, and we need to prepare for it ahead of time. Your executive team should walk through potential scenarios annually, so you can think through problem-solving strategies to find the best outcomes. Determine your moves in the best-case, probable, and worst-case so that whatever comes your way, you’re prepared to move as quickly as possible to protect and recover.
32. Focus on Customer Loyalty
Maintain a strong relationship with your customers. During a recession, your loyal customers are imperative to the survival of your business. Customer acquisition can be difficult during an economic downturn, so customer retention becomes more important than ever. Do this by remaining in touch. Check in periodically to see how they’re doing and if there’s anything you can help them with. Let them know that you care.
33. Focus on What You Do Best
When times are tough, it's time to focus on your strengths, in my opinion. Determine which of your items and services are the most profitable and simple to offer. For new product development and experimentation, and economic slump may not be the ideal moment. Invest your time and attention in areas where you can get the greatest immediate return on your investment.
34. Diversify Your Products
Expand your product offerings. It’s difficult to find new customers during a recession, but one way to expand your reach is by offering new products. By diversifying what you’re currently selling, you’ll be able to not only re-engage with your current customers, but you’ll be able to find new customers as well.
35. Diversify Everything You Can
In my opinion, if you just provide one service in one sector or if all of your money is riding on the success of one product, your firm is doomed to collapse when the economy tanks and people stop spending money on that service or product. Create passive revenue sources and broaden your products to serve a wider range of businesses and consumers.
Edward Mellett of Wikijob
36. Create a Cash Flow Plan
From my point of view, look into money sources before you need them. Alternative funding, private equity, and government resources such as SBA loans should all be considered. For business owners, running out of cash is always an issue, but it becomes even more critical during a recession. Begin by tracking your current cash balances, monthly cash sources and uses. Create a quarterly rolling cash flow estimate to aid management and alert them to discrepancies.
37. Concentrate on Your Best
There are times when it is necessary to put time and effort into a new route with an unclear return on investment. The largest risks may sometimes lead to the highest rewards. A recession, on the other hand, is not one of those periods. Instead, companies should focus on the products and services that they know will perform best. They also shouldn't waste money supporting inferior products or services. The emphasis should be on marketing the finest.
38. Prioritize Development
I'm convinced. When business is good, too many firms cut down on their expansion ambitions. You're setting yourself up for a fall if you do this. The foundation for future sales is laid through business development. Make time on your calendar for networking, brainstorming new methods, and so forth.
39. Make Flexible Client Contracts
From my point of view, one way to build customer loyalty is to work out a deal where one hand washes the other. Offer incentives in exchange for a certain amount of sales volume, or modify your services in exchange for shorter payment terms. Being flexible can generate goodwill and repeat consumers in addition to improving variables that assist to stabilize revenue streams.
40. Concentrate On Your "The Best"
Instead of focusing on all of your clients or consumers, concentrate on those with whom you already have a relationship, those who offer complementary products and services, or those who live in your region. They are more likely to refer your goods or services to others since they trust you, can vouch for your work or products, and have had the opportunity to work side by side with you, as opposed to clients with whom you haven't worked much.
41. Mastering the Art of Cash Flow
Keeping a careful watch on your costs and cash flow will help you plan for the future and prevent overpaying in specific areas of your company. Explore new ways to increase sales and cut cash spending; this, in my opinion, will be a lengthy and financially difficult journey. Look for new sources of money to keep growing your client base and maintaining your financial security, even when present customer sales are down.
42. Keep Talking About Referrals
Referrals are an essential component of your day-to-day business operations. Without a consistent flow, sales might quickly dwindle. So, to keep those referrals coming in, make them a part of your company's culture. Consider all of the ways you market to current and prospective clients (phone, email, social media, conferences, meetings, and so on) and ensure that each of these methods includes a referral opportunity.
43. Your Ideal Persona Always Buys
Recession-proofing a small business can feel like an uphill battle. However, by taking a deep dive to understand what your clients really want, you can connect to them on a new level and craft irresistible offers, regardless of the recession. Provide value and focus on how they feel purchasing or consuming what you are selling, and not only the features. This allows you to create a strong emotional connection that will weather any economic storms.
44. Create a Cash Flow Plan
Running out of cash is a major problem for business owners at any time, but it becomes even more important during a recession. Begin by keeping track of your present cash balances, as well as your monthly cash sources and uses. Create a rolling cash flow estimate for the upcoming quarter to advise management and serve as an early warning mechanism for discrepancies.
45. Look for Ways to Save Money
Cutting operating expenses can be a difficult issue in my opinion, because maintaining a product's level of quality is especially vital during a recession. Customers should be able to see whatever you chose to cut. When looking for methods to save money, it's best to start with the biggest expenses and see if there are any modest changes that can result in big savings, such as taking advantage of early pay discounts from suppliers.
46. Analyze Your Workforce's Needs
Examine the quantity of personnel and their abilities to ensure that they are in line with what your company would require during a downturn. Prepare to make changes to ensure that workers work efficiently and are structured in a way that allows them to achieve their full potential.
Sara Johansson of Onsiter
47. Prepare Your Team
During a recession, you'll need to rely on your team to help your company stay flexible, pivot, and think imaginatively, therefore it's important that staff are prepared to tackle these difficulties. Staff cross-training and skill development can help attain this goal. Investing in employees might make them feel more connected to the company and more eager to go the additional mile when needed.
48. Work Within Your Budget
This point is fundamental to excellent business hygiene. It makes obvious sense to stay within your budget so that your company is in the best possible shape in the event of a recession. In reality, sticking to a budget or operating plan is always a good idea. Some recessions, such as the one that coincided with the commencement of the COVID-19 epidemic, occur without notice.
49. Tactical Sales and Marketing
When a recession comes, too many small businesses make the mistake of ceasing all marketing activities. However, the short-term cost savings come at the expense of creating a solid lead and sales funnel for the future. Maintaining sales and marketing activities during a slump might also help you gain market share when competitors cut back on their investments. Rather than eliminating all marketing initiatives, examine your budget to see where you are getting the highest ROI.
50. Cash Reserves = Life Raft
The number one most important thing for my real estate business to be able to weather a recession or economic downturn is to have a strong cash reserve. This is the safety net that allows us to continue operating no matter what. We keep a sizable cash reserve even in a healthy economy but even more so during times of uncertainty.
51. Under Promise and Over Deliver
The number one method to beat the recession is to provide excellent customer service. Customers will become an unpaid sales force for your firm if you perform a good job and they enjoy dealing with you. If you do excellent job, are quick to respond to concerns, make follow-up calls, send thank-you notes, and include small extras, it indicates that you care. It's also the effective approach to get your consumers to suggest you to others. Make name for yourself by providing excellent services.
52. Keep Marketing
Don't be tempted to reduce or discontinue your marketing efforts. This is not the time to be stingy with your marketing budget. If you can't afford a full-fledged marketing effort, look into low-cost alternatives like social media marketing, webinars, press releases, e-mail blasts, blogging, and online newsletters. To track your rate of return, make sure to keep your marketing operations going for at least six months.
53. Be a Lean Machine!
I already try to run my business with limited expenses and low overhead but that is even more important when facing a potential economic downturn. Many small businesses operate with more "fluff" expenses than they realize. Take a serious look at where you can tighten up and get lean so you can survive in a tough economy.
54. Diversify Your Portfolio
At first glance, this method may conjure up images of diversifying one's personal investment portfolio - a wonderful idea that is applicable if the firm maintains investments. This strategy, on the other hand, is meant to have business owners think about their fixed assets and external collaborations. Analyze current assets' returns and consider moving cash to higher-yielding existing and new investments. For example, there may be discounts on new machinery or even another company.
55. Pay Attention to the Trends
Part of being a business person means keeping your finger on the pulse of current trends in your industry, and the business world at large. By keeping an eye on general unemployment rates, the news media, and consumer engagement and sales trends, you can move ahead of the recession and begin preparing your business. There are no perfect ways to recession-proof your business, so the more time you have to prepare, the better.
56. Amp Up Consumer Engagement
Even during a recession, one of the main things that can keep a business afloat is consumer engagement. Regardless of the state of the economy, a business that has a strong, dedicated audience has a way higher chance of lasting through economic strife. Prioritizing customer engagement on social media, through email marketing, or even local outreach can help build a strong foundation that can weather the storm of any recession.
57. Downsizing Inventory
Businesses that sell any kind of product understand the importance of managing their inventory. During a recession, inventories can get particularly expensive and difficult to manage. I like to maintain a perfect balance between clearing out our inventory and retaining enough products to fulfill our orders (having smart analytics tools is extremely helpful.) I highly suggest downsizing products that are less profitable, less popular, and easier to replace.
58. Adding Extra Revenue Streams
I firmly believe that every small business can easily add a few extra revenue streams. Any small bit helps, especially during a recession. SMBs should use their current infrastructure to find new ways of making money without major investments. For me, it was about extending my existing content creation to new mediums such as podcasts, courses, consulting, etc. I found more ways to make use of my content and created multiple revenue streams from that.
59. Build Multiple Income Sources
Your business's primary revenue stream may not operate effectively during turbulent times. Because of that, diversifying sources of income is critical for a company to thrive even when the economy drops. Operating in a physical store, for example, may not have worked for you during the COVID-19 lockdown. So, to prepare your business for a similar scenario in the future, giving the customers an option to buy from you online or providing pick-up services will help your business persevere.
60. Talk to Your Investors
Remember, your investors are there to help ensure you manage your business funds correctly. To recession-proof your business, build a financial cushion by raising money from your investors. The last thing investors want is for a recession to decimate the capital they've built, so going to them for financial security is a great place to start.
61. Be Prepared For a Rainy Day
Look into a line of credit. Building a “rainy day” fund can be difficult, especially as a startup, so open a business line of credit instead. It costs very little to maintain, mainly only interest and fees when you borrow from it. But, you’d really only use this credit for an emergency. Be sure to obtain one before facing an economic downturn since many creditors will raise their lending standards during a recession.
62. Make a Rainy Day Fund
Any small businessman will tell you that managing the finances of their company is similar to managing their money. As part of a small business crisis strategy, it's a good idea to adopt a personal finance approach: the emergency fund. The fund should be capable of covering at least one month's worth of payroll expenses, as well as any other necessary business expenses.
63. Prepare an Emergency Fund
A way to recession-proof a small business is to have an emergency fund that you can use in times of need. Ideally, an emergency fund should be at least six months' worth of business operation expenses including payroll and utility bills. This way, you'll have a safety net and you'll still be able to keep the business operating even in times of a recession. Since being able to sustain your business is key to surviving the recession, having this fund will be a great investment for the company.
64. Diversification is Crucial
One of the most important things that entrepreneurs need to understand when it comes to building a successful business is the crucial role of diversification. By diversifying your offerings and expanding into new markets or product lines, you minimize your risk of relying too heavily on one area or customer base. Additionally, diversification can help expand your reach and appeal to new audiences, which can help sustain business growth even during challenging times.
65. Small Business Recession-Proof
Rethink your team. Occasionally, as your firm expands, you add team members as needed but fail to consider the big picture. Consider the organization of your team's responsibilities and reporting structure. You may even discover that you can reduce the number of hours required. Next, consider ways to streamline your business using technology before an actual need occurs. Prioritize development. The development of a business creates the framework for future sales.
66. Prefunding Work Is Smart Idea
Financing pre-work is a good idea before you need it. Appraising assets that could be used as collateral, discussing trade-credit possibilities with vendors, increasing your business' credit rating, or negotiating longer payment terms on existing loans are some examples. If you've never employed asset-based financing such as factoring, buy order financing, or accounts receivable financing before, do your research.
William Westerlund of Almvest
67. Diversification is Critical
Increase your revenue streams by diversifying. Diversification is crucial for long-term success as a business owner in uncertain times. The world is unpredictable, and what worked yesterday may not work tomorrow, but diversification, or at the very least having a plan in place, will assist you in rising above the risk.
68. Focus on What You Do Best
Concentrate on your primary business. A recession is an ideal moment to concentrate on what you do best. Consider the items and services you sell and evaluate which ones are the most lucrative and easiest to deliver.
69. Ways to Recession-Proof
First, any contingency planning endeavor should start with a good baseline strategy. Create a profit and loss, cash flow, and balance sheet. As a result, fluctuations in sales directly affect other financial accounts. Having a forecasting tool can help now.
70. Hire a Revenue Ops Manager
A Revenue Operations Manager will help you ensure that your business objectives and marketing strategies are on track to drive revenue and stay within budget. They’ll help align the sales and marketing teams to maximize efficiency and connect the two teams more closely, so that they’re working towards shared business goals. They can also work to improve efficiencies through workplace technology that streamlines business processes.
71. Diversify Customer Base
The best way to ensure the business is recession-proof is to diversify.
I don't mean to "diversify product" but "diversify your customer base." If you can find more than one market for your product, you're going to be much better positioned to weather the storm if one market experiences a downturn.
Of course, it's important to minimize risk by diversifying your products as well—that way, if something goes wrong with one of your products, you still have other options to survive.
72. Prioritize Your Clients
It's critical to cultivate client relationships and maintain exceptional customer service. In any economic situation, but especially during a recession, staying close to your clients and overdelivering your promises makes sense. In addition, understanding and providing solutions to clients' evolving demands will enable your company to maintain revenue while also expanding your client base.
73. Make a Plan of Action
The problem, in my opinion, is that most organizations wait until their business is in trouble before trying to come up with solutions. Instead, you should make a strategy ahead of time. Make a list of specific things to complete whenever your business slows down. This might entail things like researching new product ideas, reaching out to connections, and marketing to your most loyal clients, among other things.
74. Eliminate Overhead Costs
Do not wait until you are unable to pay your vendors. Examine your accounts right now to see if there are any areas where you may save money. There may be a period of time between when you decide to cut back and when the cuts take effect. Some contracts, for example, may have notice periods. Because you have credit terms with your suppliers, cutting costs may not benefit your cash flow for a while.
75. Stick to Your Business Plan
First things first, do you have a business plan? If not, it's time to make one. The best step to recession-proofing your company is to have a solid plan. This will help you forecast anything that may come in the future, including any unforeseen changes to the global economy. Business plans keep things sharp and in focus, making it easy to stay on course no matter what is going on in the world.
76. Stay in the Game
The best way to recession proof your business is to stay in the game and weather it out. Most businesses will try their best to survive and not go under, while you need to be focused on growing. Every industry is different and there isn't room here, but this change in mindset will let you go through a recession and come out stronger. Plus, focusing on growth fills you with optimism and an optimistic mind can overcome any challenge life throws at it. Every recession has an end.
77. Business Woman on Recession
Every business has one thing they are especially good at. Focusing on this can help carry small businesses through a recession. Additionally, it is important to never stop marketing your small business. Marketing efforts can leverage a business through a recession and ensure that it still remains in the public eye. Lastly, it is vital to invest in already existing customers. These customers are reliable and will likely be the large part of what aids a small business in sustaining itself.
78. In and Out
Be very mindful of the in and out of your cash flow. Make sure that what you spend on can actually bring in the same value whether in present or future time. See what accounts can be cancelled, subscriptions that you can unsubscribe to and fees that you can minimize over time. Over all, be very sensitive in everything related to cash and value.
Daisy Jing of Banish
79. Budget for Every Scenario
The number one key to building a recession-proof small business is to create a detailed and ongoing annual plan with up to three budget scenarios in the form of a full profit and loss statement. Each budget scenario should reflect a "best case", "base case", and "worst case" revenue forecast, along with the expenses you can afford to spend under each of those revenue scenarios. This helps forecast your runway under a multitude of potential business outcomes and lets you plan for any situation.
80. Keep Relationships Strong
Building strong relationships will help you weather any storm. For example, if you need a few extra days to make a rent payment or pay back a vendor, strong relationships with those individuals will help you stay afloat and buy you valuable time. Client relationships are equally important. Even in tough times, people will stay loyal to businesses they trust, so it’s important to build that loyalty before difficulties arise.
81. Continue Marketing Initiatives
While businesses may feel that they need to shy away from spending during a recession, the truth is that they need to take some kind of risk to stay afloat. This is why it is especially important during this time to keep showcasing your business through social media posts or PPC ads. You have to try to keep the momentum going in terms of marketing in order to keep gaining and retaining customers.
82. Save Save Save!
Saving is always important and the money you save can be quite useful when a difficult time comes along. If a recession comes along, a small business’s savings can come in handy for getting through difficult times, bridging the gap through a challenging period, and even alleviating any stress.
The ability to save money is a skill and, especially for small businesses, can be hard to do. But if you can save now, it could come in handy later. Like, during a recession!
83. Sell More Low-priced Products
Rather than lowering your prices, you can focus on selling more of your low-priced products. While lowering your prices may seem like a good idea, this could backfire down the road when the recession is over and you decide to adjust your pricing back to where it was before. Your customers may not be happy with this.
84. Strong Marketing Channels
A strong, mature marketing channel can come in handy when you need to put a push on or earn some cash. If you can create a marketing channel that you can depend on, you can use it as needed to push things along, even during a difficult time like a recession or pandemic.
The power of a strong marketing channel can change things entirely for any small business and, if you can create a quality stream, it can be the insurance you need to get through any difficult period.
85. Customer Retention Strategy
Develop a strong customer retention strategy. You must continue to deliver value to your clients so that your company is not one of the first to be cut off when a recession strikes. Consider establishing a dedicated customer retention team focused on providing real-time support for problems such as payment disputes and technical issues and optimizing the entire customer experience by improving customer onboarding and implementing an omnichannel communication strategy.
86. Identify Priority Spending
There is a tendency to make knee-jerk decisions that can exacerbate problems in recession conditions, so it is important to distinguish between priority and non-priority spending. Cutting spending on every line is a temporary fix and can cost more in the long run.
Using ROI, you can prioritize items that drive your strategy by identifying P & L and operation costs, to maximize each dollar. In addition, by eliminating unnecessary costs, you can insulate against tough recession conditions.
Cody Candee of Bounce
87. Prepare For a Recession
You can prepare financially for a recession. By doing so, you will be able to get your bearings once it happens, rather than panicking and becoming desperate for new customers. For instance, with the funds you have saved for this situation, you can take your time coming up with new marketing strategies to keep attracting customers to your business.
88. Bump Up Your Prices
As inflation barrels ahead in 2022, small businesses need to be evaluating their prices as a step toward recession-proofing themselves. While consumers are seeing prices go up across the board, now is the best possible time to make adjustments to your prices as well. Even a small bump can go a long way to ensure your business keeps up with inflation.
Kristian Pettyjohn of PhotoUp
89. One Problem is Not Enough
A frequent question for anyone starting a new business is, "What problem will your business solve?" The thought is that if a business can solve a meaningful problem, it will inevitably be successful. But with wild economic changes, the more appropriate question needs to be, "What problems will your business solve?" If a business solves a problem (singular), and the market collapses, they may be unable to adapt. To recession-proof your business, it is essential that you solve problems (plural).
90. Good Care of Existing Clients
During an economic downturn, existing clients will be one of your most precious assets, so take care of the ones you currently have. Maintain contact with customers and explore low-cost solutions to improve customer service. Even the most devoted consumers will be seeking methods to save money. As a result, you don't want to provide any potential customer a reason to look at your competition.
Robert Johansson of imgkits
91. Refinance to Weather Recession
Cutting expenses is a typical response to a possible recession, however, managing debts is often overlooked, and is why a good strategy to reduce costs is through refinancing debt. Most debt comes with interest rates that can drive up expenses.
Paying down high interest credit cards, refinancing loans, converting short-term debt to a long-term plan, and renegotiating interest rates can have a massive impact. By managing your debt as much as other expenditures, you can weather a recession.
92. Tips for Recession-proofing
Diversify your customer base. Don’t depend on just a few customers for the majority of your revenue. If one or two of them go away, you’ll still have others to keep things going.
93. Listen to Your Customers
Ask your customers what they want, what they can afford, what they'll like you to change about your product, and how you can make it more accessible and convenient to use your product or service. Tweak your business model based on the feedback. Treat your clientele like they own your business and want it to succeed and you'll be able to thrive even during the recession.
94. Keep Your Marketing Budget
The marketing costs of the company don't return profits right away, which is one reason why companies think it's okay to include such in the cost cutting. Hence keep this in mind. Cutting your marketing budget will create a negative impact for your business in the long run and can create setbacks, too. Keeping your marketing budget will definitely help you stay afloat during the recession period, since the marketing team can help you troubleshoot what strategies to implement for revenue.
95. Fund a Cash Cushion
Rainy day funds are a must for every business. When the economy turns bad, you don’t want to be left with no money to reinvest in the business or pivot it to adjust to the economy. As such, having a small cash cushion is necessary for every small business. Sometimes, you may not have the financial means to build this cushion. In such a situation, I would recommend opening a line of credit. You don’t have to use this line of credit; just save it for a rainy day.
96. Multiple Revenue Streams
One of my best tips to make your small business recession-proof is to build multiple revenue streams. This is one of the most obvious strategies. You don’t want to put all your eggs in one basket and risk losing it when the economy overturns. This is why you should play the safer option and build several revenue-generating sources. When an economic downturn occurs and one of your income streams dries out, you’ll have another one to rely on and keep business operations running.
97. Focus On Cash Flow
Always keep an eye on your business's cash flow, as it would help to make stable decisions in the future. Understand the changes you need to make in order to keep your company as stable as possible. At this moment, you would also realize the importance of interlinked financial forecasts. Implement a system that ensures your customers are paying on time. It would help you in building a cash cushion and practicing good habits.
98. Founder's Tip
My number one tip for recession-proofing a small business is to protect your cash flow. Maintaining a stable cash flow is necessary to keep your business afloat, especially during times of economic distress. Failure to do so can decrease your profit margins and force you to close your company. So, audit your spending, cut back on unnecessary expenses, and seek professional financial assistance to help your business thrive.
99. Director's Tip
Bad economic conditions and recessions are challenging times for everyone. So, it’ll be hard to find new buyers. Instead, you must focus on your already existing base of loyal customers. Try to build better relationships with them and provide tempting discounts on your products to encourage them to buy. This will help you generate as many sales as you can from your existing customers so that your business remains profitable and successful.
100. Audit the Team
We like to think that we have the optimum number of employees and that they are all kept busy enough to justify their presence in the business. In reality, however, on close inspection you will probably find that some are repeating work done by others, some have excessive downtime, and others may be doing unnecessary tasks for part of the day. Make savings by auditing the workforce, cutting out unnecessary double-tasking, and aligning the tasks to be done with those most suited to do them.
101. Reduce Your Expenses
One of the best ways to ensure your business is recession-proofed is to be smart about expenses. Keep a close eye on your expenses and invest only in necessary growth. This will help you avoid risky debts that could put your business at risk during recession.
It's essential to keep your costs low. This may mean cutting back on advertising and making other sacrifices. Review your budget and look for ways to reduce costs without compromising the quality of your product or service.
102. Marketing Spend to Revenue
One of my favorite recession strategies is to tie your spending to revenue. It means that instead of creating a specific budget for marketing, you instead predict that spending to be a percentage of the given revenue. By using this method, you can keep the spending in check and if sales start to decline or affect the budget, you can use this tactic on more than just one department of the company. This works perfectly with small businesses as they are able to weather tough times on limited budget.
Albert Vaisman of Soxy
103. Work With Suppliers to Prepare
Supply chains are critical to a business, and by leveraging relationships with them, you can help prepare for a recession. Suppliers want to keep good customers, thus, they are often willing to be flexible.
Asking to re-negotiate pricing, payment options, and interest rates can reduce recession risk. In addition, not being dependent on a single supplier can provide more ability to negotiate. By leveraging your relationships with suppliers, you can increase your options in a recession.
Yuvi Alpert of Noemie
104. Invest in Technology
During prosperous times, invest in new technology. It will help you streamline your business in the present, but it will also make your company more recession-proof in the long run. Automation makes your business run smoother, cutting down on busy work and unnecessary labor. And when economic hardship strikes, you’ll need that optimization.
105. Prioritize Development
When things are going well, many companies will rest instead of using that momentum to do more. But in order to prepare for tough times, you need to take total advantage of the good ones, expanding and growing whenever possible. This development not only makes future sales possible, but it also strengthens your business, making it more recession-proof.
106. Ditch Assets for Services
I have found a good way to recession-proof your business is to limit your physical assets and to focus on offering services. This lets you stay flexible. The more inventory and physical assets you have, the harder it is to scale down when things slow down.
Real estate and other asset-heavy businesses had a hard time in the last recession.
By focusing on services, you can scale up or down as demand shifts with the overall economy.
107. Find & Respect Loyal Customers
Loyal customers who continue to come back should never be overlooked. Don't take them for granted and try not to cater to new customers in a way that makes returning customers feel like they aren't as important.
If you can find loyal customers, keep them coming back, and show them how much their business means to you, you should be able to depend on them in a time of need (aka: a pandemic or recession).
Loyal customers are so important - so do what you can to keep them coming back.
108. Set Up Flexible Agreements
Flexible contracts help businesses to weather economic downturns without having to completely restructure their operations. During a downturn, it is important to protect your revenue stream so that you may reduce costs. When an economic slump is imminent, you should think about how to respond to requests to alter or terminate a contract.
109. Remove the Adornments
Cost-cutting might be an effective approach to retain profitability if you're expecting or experiencing a reduction in sales. If you work in marketing, for example, you might consider having a more virtual business. Rather than wasting money on rent and gas, you may encourage your employees and clients to cooperate utilizing online technologies. It's also a good idea to look over your day-to-day operating costs. When was the last time you changed insurance companies, etc.?
110. Shift Your Focus to Recession
If your core firm is experiencing difficulties, consider how you can apply your talents and infrastructure to more recession-resistant areas. Consider getting into the bulk discounted food game if you manage a supermarket, for example. Instead of pushing new cars, a car dealer can concentrate on maintenance and used sales. If you work in interior design, you might be interested in home staging, which is making homes appear their best.
111. Maintain Customer Trust
Keeping costs low means that you have some wiggle room to maintain the trust of your customers during a recession. If inflation causes your costs to rise, keeping them low means you can still produce or fulfill services without passing on a cost increase to your customers. Maintaining your prices is essential to ensuring that your product is still accessible and viable for your customers. Stable costs can also help build trust between brands and consumers, which is essential during a recession.
Experiment With Various Scenarios: With a financial projection in place, I believe you may experiment with different financial situations to see how cash and earnings change. You should test both an overall business slowdown and specific revenue source slowdowns. Consider how you might respond to a revenue reduction by reducing spending in each case.
Josh Pelletier, Chief Marketing Officer of BarBend
113. Consider a Credit Line
To develop a financial cushion or "rainy day reserve" is difficult for firms, in my opinion. Most companies reinvest a large amount of their cash flow to fuel future growth. Consider a business line of credit as a cash reserve in this situation. Ideally, you will only use this line of credit when absolutely required, and it will only cost your company pennies to keep it open.
114. Consider a Few Markets
Diversification is a great way to withstand business downturns. During the coronavirus outbreak, some high-end restaurants entered the takeout market and shifted their attention to lower-cost goods, therefore targeting a different consumer base. Many restaurants have added meal kits and other family-friendly options to their menus. Many of these restaurants have kept their newer offers when they reopened, as the new lines of business enhanced revenue prospects.
115. Form Stable Alliances
As an expert, I believe that relationships are more important than ever during a recession. The ability to postpone rent or vendor payments will be much easier if you already have established, trusting ties. Establish such links ahead of time to make it easier to seek for help when needed. Remember your customer relationships. Building great relationships in good times will help you keep them in bad times. People will work with firms they know and trust.
116. Make Your Insurance Work Best
For small business owners who didn't review their business insurance during the COVID-19 pandemic, it should be a must now -- especially if you had initially wanted to keep things simple and cheap, and you had purchased a BOP (business owners policy).
A BOP is a generalized insurance policy. Review it to see if you want to make adjustments to craft a policy that better meets your needs. Or you may want to opt for commercial multiple peril insurance, including business interruption insurance.
117. Explore Pricing Models
Explore different pricing models.
I believe that more price points make for a larger customer. It is possible to enhance sales and reach customers who are hesitant to buy in uncertain times. Instead of selling, rent. Consider decreasing your costs or unbundling your services to increase customization. Clients can subscribe to something instead of buying it once.
118. Focus on Value
During the recession, consumers want to get more value from their purchases. So you need to position your product or service as a great value. But you should remember that "value" isn't the same as "low price." Cutting prices isn't a sustainable tactic as someone else may be ready to lose more money by making deeper price cuts. So instead of cutting prices, you should change your marketing message to highlight your unique value and benefits for your customers.
Ryan Montgomery of Become
119. Prioritize Customer Retention
It always costs more to acquire new customers than to maintain existing ones. And during difficult times, people clamp down on their spending, so it's harder to persuade new customers to give your business a try. Now, it's more important to invest in the customers you already have and build genuine relationships with them. You should treat them with respect and think of ways that you can make a meaningful, positive difference for them.
120. Get Smart About Marketing
When a recession hits, it’s essential to do whatever you can to stay top-of-mind for customers. Despite financial hardships, you shouldn’t abandon your marketing efforts. Just review your spending to see where you get the best ROI. Use this time to create a strong online presence. It pays off to create meaningful content for your website and engage with your customers and prospects on social media.
121. Focus on Core Competencies
Every business has something they’re really good at—it’s their core product or service, which can carry the company through a recession. You should focus on scaling and promoting the products or services you know will perform the best. Supporting weaker products or services is just a waste of time and money. And mastering what your company does the best will help ensure you’ll have a stable foundation when the economy shifts.
122. Invest in a Financial Planner
Make a financial planner your new best friend, as it will help in managing small businesses’ cash flow, expenses, income, savings, and other financial flows. When your revenue is strong, hire a knowledgeable financial planner. Do not wait to hire a financial planner until a recession hits the economy. Be prepared beforehand and take control of all business cash flows. This way, you will always be prepared for rainy days and find efficient ways to recession-proof your business.
123. Tie Marketing Budget & Revenue
This can prove to be a helpful budgeting strategy for your business, as you would tie certain business spending to your revenue. For this strategy to be implemented properly, you would have to forecast all of your marketing spending as a percentage of your revenue, instead of creating a specific marketing budget. This would help you keep your spending in check in case there is a decline in sales or increase the budget if sales increase.
Kevin King of ICRFQ
124. Have a Robust Business Plan
The foundation of any recession-proof plan lies in a good baseline plan that forecasts how things might go in the future. If you have made a solid business plan, it should generally take into account your contingency for dealing with major problems like disasters and recession. Ideally, you would want to lay out step-by-step directions that detail how to proceed when a recession strikes.
125. Invest in Adaptable Technology
Among the most critical steps my team took, I believe, was to prepare for video auditions rather than in-person auditions. This enabled us to conduct business as usual despite the pandemic's unexpected circumstances.
Joe Manna of Alyce
126. Create an Action Plan
The issue, I believe, is that most businesses wait until their business is in trouble before attempting to find solutions. Rather than that, you must develop a strategy in advance. This could include researching new product ideas, contacting contacts, and marketing to your most loyal customers, among other things.
Marc Stitt of FMX
127. Clean Up Accounts Receivable
When going through a recession, you want to maximize all revenue sources.
One hidden source of revenue can be collecting money from your accounts receivable.
Hiring a collection agency can help extract as much money from these accounts, which will help a business survive the lean times.
So, look through those old files and utilize a collection agency to get extra revenue. Remember, don't feel ashamed by using a debt collector as you aren't the one who broke the promise to pay as agreed.
128. Be Prepared With a Plan
Have a plan for growing your business and be ready to make changes when necessary. A small business should be prepared for tough times by having a strong financial foundation in place.
This means having enough saved money to cover expenses for at least six months, and ideally twelve months. You should also have a sound financial plan to ensure that it can weather any economic downturn.
You should also have a strong marketing strategy as part of your plan to attract and retain customers.
129. Build a 6 Month Emergency Fund
Your business should have 6 months' worth of expenses in savings as an emergency fund to keep the lights on in case of a recession. Since most recessions don’t last that long, this should be enough for you to survive until the end of the recession. To do this, take the monthly average of your fixed and variable expenses and multiply this by 6.
Then, set a goal for when you want to have your emergency fund completed and calculate how much you need to set aside monthly to reach your goal.
130. $20,000 in Sales w/ Live Shows
Our business was worried about going through another economic issue and hurting our business severely again. We decided to do live shows online where customers could purchase our items. We set up a Youtube Live Channel, which was free. Then, used our iphone to record the show, purchased a couple cheap mics on Amazon, and advertised it to our followers. While it took a few months to take off, we now have over 2,000 people watching us each month. Our last show generated over $20,000 in sales.
131. Eliminate or Mitigate Debts
Take care of existing debts before a recession puts more financial stress on your business. One worst-case scenario of owning a small business in a recession is not only shutting down but owing lenders the money you need to maintain operations. The better you handle these debts before an economic downturn, the better of a position you will be in to renegotiate payments and interest when the economy does tank.
132. Strong Customer Relationships
Maintaining strong relationships with your customers is vital, particularly when your business isn’t an essential service. In recessions, customers are far more deliberate with their budgeting. To be one of the non-essentials that aren’t removed from their budget, you should establish your relationship as stronger than a simple customer-business relationship. As a first step, smaller businesses can focus on individual relationships, while larger ones can develop customer loyalty programs.
Rob Bartlett of WTFast
133. Prepare an Online Strategy
Have your digital marketing plan locked down well before the economic downturn. As people continue to shop online where they can research what they buy, position your business to attract and convert the most online customers as possible. If and when the economy takes a turn, you can adapt your business strategy from a position of maximizing your sales not limited to a physical location. Going digital could help consolidate costs and open other avenues for your business to generate revenue.
James Shalhoub of Finn
134. Constantly Be Proactive
We run many business seminars and the two things we always tell business owners is 1. Constantly optimize your operating costs to make sure you are truly only spending what you need to and not wasting dollars on unnecessary items and 2. Constantly optimize your core offer to make sure you are delivering a stellar experience to your customers so that they need you no matter what. The key to being recession proof is about being proactive and never getting lazy in your business.
135. Reduce Inventory
When a recession strikes, one of the primary concerns for a small business is that it will be forced to hang on to excess inventory. Once this occurs, their two options are to sell their goods at a deep discount or continue paying for the overage housing until conditions improve. Small firms should start looking into just-in-time inventory management practices whenever possible to prevent falling victim to such an outcome.
136. Seal the Deals With High-Value
Focusing on high-value customers is vital to weather a recession as these accounts impact your bottom line significantly. Account-based marketing drives higher revenue when you concentrate on high-value accounts instead of wasting time, money, and resources on every prospect. These accounts match your ideal customer profile and have an immediate need for your offering. Their buyers are easy to reach and respond well to your inbound and outbound messaging. They also have a longer sales cycle.
137. Use ERP/Accounting Software
One thing we've told small business owners is to start using ERP/accounting software right now, so that if a recession hits, you'll have a clear picture of where your business is at. You'll be able to know how every penny is being spent, which will enable you to maximize profits and lower overhead costs. During the Recession from 2007-2012, in our industry 20-25% of retailers went out of business. But out of our customers that utilized ERP software, only 3% lost their business.
138. Bet on Neuromarketing
Bet on neuromarketing to make the business recession-proof. If in the recession period, a small business succeeds in deciphering consumers’ behavior, (neuromarketing helps in anticipating consumers’ behavior to make the best strategies to attract and retain consumers) it can capture more sales and thus, more profit to survive in an economic downturn. It will keep the small business running and cash flow coming in the best way possible.
139. Stay on Top of Debt Repayments
During a recession, it's likely that sales figures will end up on the lower side as consumers become more frugal with their money. In such circumstances, financial forecasts of the past may not strictly line up with the future. Excess debt could snowball due to compound interest, potentially putting your business in jeopardy. Never assume that profits today will be your profits tomorrow, and always have a contingency plan in place to pay back the money that you've borrowed.
140. Monitor Your Cash Flow
One of the biggest reasons for insolvency is bad financial management. If you have an inconsistent cash flow and fail to prepare in advance, it could spell an end to your business altogether. To recession proof your business, make sure that you have enough money on hand to cover monthly expenses such as payroll, insurance, and rent. Having a buffer stored away protects your business during a down-turn, and keeps it operational during unforeseen circumstances.
141. Boost Customer Relationships
Strengthen customer relationships during good times so if ever recession comes, you can still enjoy their support. Make the customer experience seamless for your current customer base. This could encourage them to do more business with you. They can even help you promote your business to prospects via word of mouth and testimonials.
Take time improving your products and services to suit existing customers’ needs, introduce incentive programs, or enhance your after-sales service.
142. Service VS. Value
As a marketer who helps businesses position themselves in their area as a valued community resource, I recommend putting your business in a position of being a resource to make you a company that people WANT to talk about and support. I personally did this as a mobile mechanic and was able to not only book my calendar out for weeks, but was able to solidify my stance in my community to where even after I got injured and couldn't continue working, I was still getting referral calls.
143. Broaden Your Offerings
Even if your company is small, diversifying your business is always a good idea because if you just do one thing, you're at a little more of a risk. After all, we all know the expression that you shouldn't put all your eggs in one basket. Analyze the needs of your current and potential customers and try to add new complementary products or services. Just make sure that the new offerings create value for your customers.
Ronen Yuval of Karma
144. Improve Customer Targeting
It's always important to target the right audience with marketing and advertising. But during an economic downturn, when your marketing budget is tight, targeting the right audience is essential for survival. You should find out what your customers need right now and make the necessary marketing adjustments from what you learn. You may need to change your targeting to focus on one particular niche within your audience or perhaps focus on a new niche that has emerged.
145. Cut Unnecessary Spending
Cutting costs can be an effective way to maintain profitability when experiencing a drop in revenue. So, you should audit your current spending and look for services or resources that your business can function without for some time. For example, you could try running a more virtual business by using online tools to collaborate with your team and your customers rather than spending money on the rental.
146. Develop Innovative Practices
Developing innovative practices to improve your operating processes and deliver a better customer experience may help you adapt to changing market conditions and beat your competition. As part of this process, you should review if using technology will help your team function more efficiently and reduce costs, making your business more competitive. For example, you may use automated solutions to complete repetitive tasks or install a customer management system.
147. How We Became Recession-proof
Become indispensable by providing an essential service that businesses will need at any stage of growth. Our company, WorkSuites, provides full service & flexible office space to large companies needing to downsize, new entrepreneurs finally taking the leap & small growing businesses. For example, if you are laid off, we help you start your own business; if you want to work a hybrid work schedule, we have part-time offices near home. No matter how large or small the business, have a solution.
148. Build Multiple Revenue Streams
For instance, your area of service is social media marketing. Don’t just offer social media marketing services per se. Consider a handful of things that align with it—like SEO copywriting, paid media advertising, direct selling, email marketing, graphic design, and other things found under the umbrella of marketing.
Building multiple revenue streams help small business owners have plans and alternatives if the economic decline has hampered a specific service in your niche.
149. Ready to Pivot
If you're in an industry that's likely to take a hit during a recession, it might be time to consider pivoting.
It might be tempting to try and hold on to the customer base you already have, but if those people are no longer buying from you and you're struggling, it's time to take a hard look at your business model and figure out what you can do differently. It's never too late to rethink your marketing strategy and introduce yourself to a new audience.
150. Don't Over-Expand
When business is good, it's tempting to hire more workers. Only hire the workers you need. This will eliminate the need to possibly lay off workers.
Opt for an agile workforce. Freelancers are a great way to expand slowly and efficiently.
Over-expanding and spending too much on business expenses can lead to scrambling in the event of a bump in the market. If your business is growing, keep a steady plan to maintain growth. Avoid expensive long-term contracts.
151. Determine Your Company's Risk
Check your gut to see how much risk your company can tolerate, its risk mindset, and how much more risk it's willing to accept. It's critical to examine your leaders, personnel, and processes honestly to understand how adaptive they are and how much risk they can take before buckling under pressure. Include both the physical and emotional costs of missing targets, such as reputation management.
152. A Small Business CFO's Tip
My best tip for recession-proofing a small business is to implement a dynamic financial forecast that includes a worst-case scenario analysis. This will give you a view into what operational levers you can pull to weather the storm, such as reducing discretionary spending or specific headcount. It will also show how many months of cash runway you have at your current expense level. Cash is king, especially in a recession. Most small businesses that fail ignore this lesson.
153. Stash That Cash!
A small decrease in revenue driven by a recession can create a serious cash crunch. You don't want to decide what services to cut when you are out of cash.
If you see a recession coming or your internal business indicators are showing slowing growth or declining revenue, you should already have a list prepared of what services aren't essential and can be pared. Unfortunately, this often includes a prioritization of staff and who is most important to the business.
154. Diversify Your Business
The key to recession-proofing a business is to diversify. Instead of just focusing on one product or service, businesses should look into branching out to find new ways to make money. That way, when one stream dries up, the business can continue to make revenue.
155. Cut Carefully
I made the mistake of cutting down on some of the tiny things that made my first business interesting and engaging for employees during the Great Recession. The Great Recession was my first downturn as a business owner, and I had no clue how far its consequences would go into our finances. So, I took other business owners' advice and reduced workplace events, weekly staff breakfasts, incentive-based competitions, and company vacations — things cost money but made work a more enjoyable place.
156. Be Essential!
To become recession-proof as a small business, you need to position yourself as an “essential service,” at least in the eyes of your potential clients. You need to be seen as something indispensable, something they cannot do away with even when financial priorities are tight. To do this, you must be extremely clear about your core value proposition – what your service is, who is it for, and how it helps them.
157. Content is King
I think one creative tip would be to start developing a content strategy they can monetize. This would be some type of content that you can provide your customers and prospects access to at a relatively low price that does not have the same normal inputs like inventory cost and supply chain that you have to navigate margins. Ideally, this is some kind of feed or membership you create for people that you can adjust the cost on while still maintaining high margins.
158. Recession-proof Products
You hear people often say that funeral homes are recession-proof because people will always die. That's morbid, but there is good advice there. If your small business is selling hair conditioner for exotic dogs, your business will likely not survive an economic downturn. On the other hand, people will always need to feed their dogs, so offering healthy dog food would help protect your business from economic trouble ahead.
159. Expand Your Brand
Brand expansion entails innovation, digital transformation, and embracing marketing technology, such as social media marketing. One innovative and trending business tactic is expanding a brand from eCommerce to social commerce, allowing the online seller to reach more prospects and drive their sales. Expanding products and services involves finding and exploring multiple and diverse audiences and sales and marketing platforms.
160. Recession-proof Small Business
Covid-19, reduced business opportunities, canceled contracts, and less demand for my company's products and services, higher debt in different countries indicate an upcoming recession. To make my company recession-proof, I have taken the following steps:
1. Work From Home and Automation
2. Aggressive Sales Campaigns With Discounts
3. Cost-Saving Initiatives
4. Risk Tolerance Evaluation
161. Stop Relying On Credit
If you're used to using credit cards or loans to finance your business, it may be time to reevaluate this strategy. While it makes sense to use debt in times of growth, doing so now could put you in a tough spot if things don't pick up within the next few years. Instead, consider ways you can reduce expenses and operate on a cash basis until things start looking up again.
Tom Leighton of Sofary
162. Automation Weakens Inflation!
To survive a recession, a small business can automate as many processes as possible. In good times and bad, the one constant is change. Doing so will save time and money and increase both the quality of product and customer satisfaction. Automation is particularly useful for large companies, but even the smallest businesses can profit from it. The key is to automate processes that are both repetitive and that don't require much human effort.
163. Efficient Businesses Survive
In tough economic times, a business needs to make sure that it is as efficient as possible. This can be done in a number of ways. The most popular is by hiring part-time workers to complete the tasks that do not need full-time attention. This saves on salary and other expenditures like benefits. In this way, the business has a chance to bring in more profit with a little workforce and less cost.
164. Save Every Coin Possible
Small business can become recession-proof by making sure every penny they have goes to the things that matter to be successful. Businesses can do a lot of different things to cut costs and be frugal, but a lot of the things only people who work there would notice. For example, they can switch their lights to those that use less electricity, get rid of the custom print on their coffee cups, and take their lunch to work instead of buying it. This will help them stay afloat in bad times.
165. Reduce the Prices of Stock
Lowering the price of your products is a great way to bring customers into your store during a recession. Lower prices can help attract more customers. Still, it is better to make less money than no money at all. It is also important to show that you are willing to sacrifice for your customers and make extra effort to be available for them. By lowering your prices, you are demonstrating that you are willing to do what it takes to keep your customer base intact while waiting for the recession to end.
166. Break Through the Noise
The first item most businesses cut as they head into a recession is their marketing budget, however they should increase spend there and look for cost saving options elsewhere. When forecasts are negative, the noise fades away, making this the perfect time for small businesses to stand up and be noticed. Businesses who maintain or increase their marketing spend not only recession proof their business, but potentially set themselves up for a significant increase in their profits.
167. Focus on What Matters Most
When fighting recession, we have to know what are the essential things we need to focus on including the big picture items of Mission, Vision and Values, the 5 macro-economic forces (and opportunities), and know what your idea of a successful exit looks like. Tactically, we focus on increasing partnerships, leads, getting better at sales, more transactions, updating price to value, reducing COGS and expenses, and realizing that you can hire thoughtfully and lead your team to the finish line.
168. Save Money!!!
Revenue is important as long as you don’t lie about money!!!
You want to build a moat for your business. You don’t want to dump retirement funds into it. You want money that the business made. You are going to set it aside to get through back in seasons or years.
Invest the money in risk averse investments that are liquid.
169. Tip for Recession-proofing
My one best tip to help make small businesses recession-proof is always to be prepared for the worst. Have a Plan A, B and C in place, so that you can quickly pivot if things take a turn for the worse. Don't rely too heavily on any one customer or client; always have back-ups in place, and keep your costs and expenses as low as possible so that you can afford to weather any storm that comes your way.
170. Recession-proofing in 2022
The looming recession will probably come with more inflation, and shortages in supplies of many products, meaning lots of empty shelves for customers.
So, maintaining sales won't be a problem in this recession, but securing stock might be.
My tip is to try to negotiate longer-term deals with key suppliers, while allowing some flexibility on future costs, in order to secure those deals.
171. Get Financing Before Needed
As a small business owner, you always need to be prepared for the worst. That's why it's important to get financing before you even need it. This way, if a recession hits, you'll have the resources you need to weather the storm. Small businesses are often the first to feel the effects of a recession, so it's important to have a cushion of cash to fall back on. Otherwise, you could find yourself in a difficult situation.
172. Build Up Your Cash Reserves
Not only will having more cash on hand give you greater flexibility and allow you to take advantage of opportunities when they arise, but it will also help to reduce the pressure on your credit lines, thereby protecting your credit score and borrowing power. Additionally, having a cushion of cash can be especially beneficial for small businesses that operate on tight margins or depend heavily on key suppliers and customers.
173. Protect Your Business
Firstly, reduce inventory levels, renegotiate supplier contracts, consolidate facilities, etc. The less overhead you have, the better positioned you'll be to weather a downturn. Secondly, aim to have enough cash reserves to cover at least three months of operating expenses and explore alternative financing options such as leasing, factoring, or equity financing.
174. Social Proof = Recession-Proof
If you want to make your business recession-proof then you need to prove that you are the best value by showing potential customers that you offer the best products and services for their needs. You can do this by collecting more customer reviews and testimonials. Send an email to all past customers to ask how your products or services helped them achieve their goals and ask them what they liked most about the buying process. Post reviews on your website to prove your value and drive more sales!
175. Small Business Recession-proof
We explored and used adaptable technology. Preparing for video interviews rather than in-person interviews was one of the most important measures my team made. This allowed us to carry on with our company as usual, despite the pandemic's unforeseeable circumstances. Consider how you can use technology to simplify your business before a need arises. It is dependent on your company and the service or product you provide.
176. Keep Multiple Revenue Streams
Our tip to recession-proof your business is to establish multiple streams of revenue. Multiple ways of generating income for your business will ensure that the business remains afloat even if the economy is in decline. This can be done by incorporating different things such as affiliate marketing campaigns and adopting subscription models for physical and digital products. This can help to make sure that when the economy takes a downturn, you are prepared to handle the worst of it.
177. Build Meaningful Relationships
Invest in relationships, don’t just go around trying to attract new customers. Start focusing on your current customers and provide the best experience and results. Your existing customers are a great source of new ones, but referrals are given only when a person trusts a business. Make sure to fulfill your promises and provide good service to establish trust. Social media is an awesome venue to engage clients and build a community. Post content and promote offers that can have them talking.
178. Review Your Expenses
This is a great time to take a close look at your budget and see where you can make some cuts. Reducing expenses will help you weather any economic downturn. There are a number of ways you can do this, such as negotiating a lower rate with your current providers, renegotiating contracts, or cancelling unnecessary services. You can also save money by being more efficient with your spending. For example, instead of buying new equipment, see if you can repair or upgrade what you currently have.
179. Lose the Bloat to Stay Afloat!
Reduce fixed expenses, specifically, rent. If the pandemic taught us anything it's that a remote workforce does work, not for all but for many more than imagined before 2020. During the pandemic, people became acclimated to working remotely and many are still hesitant to return. By reducing your in-office workforce, you can find a smaller space with reduced rent. The monthly savings will add up quickly and help shore up your company through tough times ahead.
180. Invest in a Remote Workforce
The best way to avoid financial catastrophe is for every business to adapt and pivot. And remote work promotes crisis resilience because business continuity no longer depends on one location or the efforts of one specific employee. You can outsource help and maintain productivity across different locations and even timezones, as well as keep scaling by shifting your business model from a conventional leadership hierarchy to digitally pliable high-performing teams that are flexible by design.
181. Get Rid of Lease Equipment
If you’re currently leasing equipment or paying for it through a rent-to-own plan, it’s time to close these plans, and look into buying the equipment outright. You’ll save a lot of money by moving away from these financing methods, helping you lower overhead costs as you weather the recession.
182. Value is Recession Proof
Value is the primary reason behind any business transaction.
Think in the eyes of the customer - what value does this product provide to my life if/when money is tight?
If the answer is nothing or little, then the business owner has to get creative and use the product or service to provide more value to the customer. This could mean altering a similar type of product or service that is related or more convenient.
Michael Wootan of Hurcann
183. Tie Spending to Revenue
Tying these two metrics together ensures that you always allocate enough money to promote your products and services effectively. By focusing on revenue rather than small fluctuations in sales numbers, you can make data-driven decisions based on evidence rather than instinct alone. Thus, when it comes to taking proactive measures to protect your business against economic downturns, efficiency and long-term planning are key – and that's where tying marketing spending to revenue comes in.
184. Diversified Customer Base
This can be achieved by focusing on providing high-quality products or services that cater to a wide range of customers. Additionally, entrepreneurs should seek out new markets and target segments within each market in order to stay competitive even as the broader economy shifts. By investing time and resources into building a diverse customer base, small businesses can help insulate themselves against potential downturns in the economy, thereby ensuring their long-term success.
185. Revisit Expansion Ideas
The economy is just now recovering from a pandemic. Therefore, expansion ideas that wouldn't make sense a year or two ago might now. Take a look at them and make a comparison to the competition and make your best decision from there.
186. Recession-proof Small Business
One tip for small businesses to become recession-proof is to secure capital before they need it. The important step in keeping doors open will be flexible working capital. Business owners should not wait until a crisis to seek financial assistance. Small business owners now have a lot more options for raising finance. Banks are loosening credit standards, while fintech businesses are increasing the number of online lending options.
187. Tips for Recession-proofing
As a small business owner, my team and I are looking for different categories of products we can bring into our company to help expand our categories on our sites and provide products for every customer's need. Try to find different sub areas that fit into your company and that are similar to the products you are currently selling. Look for other categories within the feedback of your customers and see what kinds of products they are looking for and searching for.
188. Redefine Your Positioning
When it's a recession time, businesses slow down, people's income takes a hit, and so does their spending power, amongst other things. For your small business to be recession-proof, you must reposition your business to address the core human needs of your target market. You can do this by identifying the core needs of your target market, redefining and communicating your business's Unique Selling Proposition, and creating offers that align with those core needs.
189. Stay Agile
To make your business recession-proof, stay agile. Always assess the current climate and adjust to accommodate changing needs or newly established restrictions. For example, in our pre-COVID climate, our team members traveled 80% but when the pandemic hit, travel was disrupted. We had to adapt by changing our approach in order to still address our clients’ needs, even though we weren’t able to get onto a plane to do it.
190. Cities to Start Your Business
Based on small business survival rate, population growth, startup funding, and the number of new businesses, these are the 25 fastest-growing cities in the US for small businesses. You may be surprised to hear that Apex, NC is #1 out of 1,000 cities. If you're recesssion-proofing a business of your own, consider opening it in one of these cities that are proving to be successful!
191. Reputation is Recession Proof
The best way to recession proof your business is to have strong Google reviews and an automated system for generating new reviews. 98% of people read online reviews, and 49% of people trust reviews as much as recommendations from friends. They help your marketing convert better, and help you rank better in searches online, getting you free leads. When people are tighter with their dollar, they will choose the business they trust the most.
192. Marketing Your Strengths
If you want to keep getting business, you must continue marketing—especially during a recession. Identify your strengths now. What are your core competencies? Which products or services sell best? Which net the most profit? Focus your marketing efforts there and cut back on underperforming products and services. Also, keep in mind that customers are facing a recession as well. Previous customers may struggle to afford you, while those who were outside your sweet spot may be a better fit now.
193. Diversity Beats Recession
Diversifying your revenue stream is not only a great way to increase and protect your revenue, but to recession-proof your small business.
Businesses with only a single stream of revenue can be hit hard in financially challenging times, such as through recessions.
Providing multiple avenues and platforms for customers to engage with your business and for revenue generation can increase overheads, but with the rights skills and business automation - or even outsourcing - it is worth it.
194. Tips for Recession-proofing
Financially prepare for a downturn before it happens.
Whether now or in the future, don’t wait for the first signs of a recession before you start to do something about it. By then, it may be much too late. If you have an updated financial plan, start building a cash reserve, and start saving money in a bank account. Consider building enough reserve cash to cover at least six months’ worth of essential business expenses.
195. Protecting Cash Flows
Small businesses are tightly budgeted all the time. Even a single jerk in the cash flow can destroy a small business. So the plans must be fool proof and effective to continue the continuous cash flow. Sometimes, small business owners get trapped in cash problems. It happens for several reasons like not selling products in cash, late payments, poor monitoring, and inappropriate raw materials. Even one of these problems can have a huge effect. So, an owner must have a planned cash flow.
196. Start by Rethinking Your Teams
Sometimes, as your business grows, you add team members as needed, but you don't think about the big picture. Is your staff running efficiently? Take a look at how you structure your team's responsibilities and reporting structure. You might even notice that you can cut back on the hours you need.
197. Explore Variable Pricing
During a recession, both your customer base and what they require can change drastically. Design variable product offerings now so you can be prepared for the future, and don't be afraid to shift into new markets. For example, offer reduced fee introductory packages for services, slash luxury product offerings to focus on essentials, and bundle products. Finally, don't neglect the importance of personal relationships. Particularly when finances get tight, people work with those they trust.
198. Look to Save
Look to be efficient and for areas where you can save money to stay ahead of any economic downturn. For example, we hired gig workers for specialty items like editing podcasts and video production, which saved us money.
199. Master Your Monthly Burn
Understand and master your monthly burn rate. If all your customers stopped buying from you today - how much does it cost to run your business? Make a list of costs you could cut. Could you negotiate a 3-month lease freeze? Could you cut your own salary by 20%? Could you ask for better invoicing terms from suppliers? Then, take out a business credit facility or credit card for emergencies. I've seen several businesses go through this exercise and extend their survival from 6 to 12 months.
200. Multiple Revenue Streams
Creating multiple revenue streams at different price points will ensure you continue to make money during an economic downturn. If you only have one stream of revenue, this might lead to a collapse of your business in a crisis. Look into things like physical and digital products, paid membership groups, affiliate marketing, ad revenue, and sponsored content. So even if some of your revenue streams are hit by a recession, you will still be able to pivot and survive.
201. Don’t Have a Plan? Too Late
You need to start cutting back NOW, not later. When you get a whiff that things are going down, you need to already have a game plan and put it into action. If you’re starting to plan now, it’s already too late. Have a crisis plan ready to go and start making the necessary cuts in order to sustain a bare bones operation for a while. It’s prudent to cut costs and simplify your business and it’s going to save it no matter how bad the crisis is. Inflation, recession - you’re ready for it.
202. Create a Solid Plan
Creating a solid business plan can help you recession-proof your company in any industry. Planning ahead and putting a solid procedure in place for challenging times is the first step to overcoming difficult days. Most businesses can overcome these types of things, but many don't have a solid plan in place to do so. By creating a solid business plan, you can prepare for these instances and have a roadmap to help you get through to the other side!
203. Being Proactive
Being proactive and thinking ahead is the best way to make sure that your business stays and continues to be recession-proof. Anticipating risks and trends will help you plan your strategy more effectively and make it easier for you to respond to the obstacles and challenges that might come your way. Having this mindset will strengthen your business and make you a better leader.
204. Tip Inside
You must therefore invest in your existing customer. Maintaining existing customers is less expensive than acquiring new ones. This is accurate even at the finest of times. Whereas, during a recession, people tie-down on their spending – making it even more challenging to persuade a fresh customer to give you a shot.
As you navigate challenging times together, your relationships with your customers can make lifelong customer commitments.
205. Your Expenses Know the Truth
Take a closer look at the financial statements. In addition to focusing on revenue, the organization must scrutinize expenses as well, and reductions, although difficult, must be made for the organization's benefit. As a result of making changes and improving their companies, well-run companies of all sizes survived and thrived during the Great Recession.
Nothing will make your small business 100% recession-proof, though executing these can help ensure that your business endures tough times.
206. Diversify Your Planning
It's always important to be diversified and have a solid plan B, but there are a few specific things that small businesses can do to help themselves become recession-proof in 2022.
For starters, try to keep your costs as low as possible so you're not as reliant on revenue and focus on delivering exceptional customer service, so people will want to come back even during tough times.
Above all, remember that it's always better to be safe than sorry and have a Plan A, B, and C ready to go!
The telecom business, like information technology, is here to stay, regardless of the economy. The COVID-19 crisis' ramifications only served to highlight the industry's current prominence. To communicate online, people need their phones, among other things. As a result, the industry became inextricably linked to the global economy. People are interested in learning how to talk naturally in the local language of their clients as a result of the globalization of consumers.
208. Utility services for vehicles
During recessions, companies that focus on utilities, repair, and maintenance will likely survive and prosper. People are even returning to do-it-yourself crafts and mending items on their own. Some fixes, however, are simply beyond our control. This is where the service industry comes into play. Things will eventually fall down as time passes. The so-called wear and tear elements on autos will require special attention. Plumbers will need to inspect a leak in water pipelines for utilities.
Adam Crossling of Zenzero
209. Stay in Continuous Contact
Your advertising and marketing efforts should not be just focused on attracting new consumers. Did you know that 20% of your client base accounts for 80% of your revenues on average? You'll need marketing techniques that help you nurture your customer relationships over time. Keep your business fresh in their thoughts so they'll return. Sending bulletins and e-blasts to your existing customers regularly is a typical choice in email marketing. Direct mail might also be a good option.
210. Recession-proof Your Business
A recession is inescapable, but its negative consequences on our enterprises can be minimized. You need to be strategic in both finances and marketing if your company is suffering from a sales slump. Affordably marketing your company may help it recover. Strategically planning wise decisions (like digital marketing) to assist your business may be your best option. Enhance your recession-proof company's marketing strategy today with digital marketing and perhaps reach more potential customers.
211. Customers Come First
Quality customer service is as important as growing your business. Prioritizing customers means delivering what they want, when they want it. Effective customer service will likely keep existing clients while obtaining new ones. Make them feel seen and keep them engaged. Help your market grow. Remember, more people means more money. The internet has created various opportunities for you to boost traffic to your recession-proof firm and ideally increase cash flow.
212. Track Your Marketing
Once you're in a recession, one of the most typical mistakes is to slash your marketing budget. During a downturn, your marketing becomes even more crucial since you require to bring in new revenue. Although you should never eliminate marketing, there may be instances when you need to minimize costs. You'll need a lot of data to perform this right. Keep track of your marketing statistics to identify which methods and messaging are the most effective.
213. Invest in a Financial Planner
A business-finance-focused financial consultant might become your new best buddy. This sort of expert will assist you in managing your financial flow, savings, spending, and more. But don't wait until there's a downturn. When your income is high, hire a planner. In this approach, the planner can assist you in preparing for a stormy day and identifying financial strategies for recession-proofing your firm.
214. Keep Creditors Happy
If you don't have to, don't put off paying your creditors. You might believe that paying your creditors late would provide you with a cash cushion. However, if finances get tight, this strategy may backfire. It is preferable to pay creditors on time whenever possible and maintain a positive connection with those to whom you owe money. Paying debtors timely will help you negotiate arrangements with them later if you face a financial crisis.
215. Get Nimble, Now
Lockdowns saw adaptation from fast thinking entrepreneurial business owners to capitalize on opportunities born out of the restrictive measures put in place. Be quick and resourceful in areas such as:
- Finance: Have alternative sources of funding ready. Don’t be tied down to potentially crippling arrangements
- Customer base: Diversify your offering to reach a different audience
- Cost base: Lose fat that may become difficult to shift, e.g., ageing stock and inefficient premises
216. Recession Proof Small Business
Steps to make your small business recession-proof:
Watch for the dips in the stock market, leads, and sales, and get ready to cut costs. Cut costs like offices and in-hand teams that don't have strong ROI and downsize other areas of your business. Diversify your revenue stream and improve the variety of your customers, products, and services.
Dean Lee of 88Vape
217. Diversify Your Revenue Streams
Any business is susceptible to an economic recession, but businesses with a diversified revenue stream are better positioned to weather the storm.
When you diversify your income streams, you'll be able to continue operating your business during a downturn, and you'll also have more money at the end of each month. If one of your income streams dries up, you can rely on the others to support your bottom line.
218. Recession Proofing Tip
My one best tip for small businesses to thrive during a recession is to create more value that your target audience would be willing to pay for.
Start providing additional services or selling products that are relevant to your brand and your customers. By doing this, you increase the number of channels through which resources can enter your business. For example, if you own a phone shop, you could start selling phone accessories to increase cash flow.
219. Look for an Alternate
I always recommend businesses look for alternate streams of income or financing when they think they don't need it most. That is because good times never last, and during those moments, financing may become your largest burden. The easiest way to prepare for that situation is to acquire finance now, when circumstances are good and you have a decent chance of being accepted by a bank or lender.
Thanks to: Lattice Hudson.
220. Technology is Your Ally!
One best tip is to invest in technology. Technology can be instrumental in improving your workflow, automating repetitive tasks, and saving you time and money. Moreover, investing in the right technology will refine your service too. In our company, it has helped to improve our service, perfect operations, reach a wider audience, and improve our customer experience.
221. Keep a High Employee Retention
Companies often overlook the benefits of a high employee retention rate.
This strategy saves costs of training new employees, but above all, it allows to build a loyal team with a deep understanding of company culture and products. Also, taking care of employees makes them happier, so your business becomes the desired workplace. It's the perfect approach for small companies because employees are the heart of every startup.
Natalia Brzezińska of PhotoAiD
222. Create a Cash Flow Plan
Create a cash flow plan. Begin by keeping track of your present cash balances, as well as your monthly cash sources and uses. Create a rolling cash flow estimate for the upcoming quarter to advise management and serve as an early warning mechanism for variances.
223. Build Up Employee Skills
During a recession, you'll need to rely on your team to help your company stay flexible, pivot, and think imaginatively, therefore staff must be prepared to tackle these difficulties. Staff cross-training and skill development can help attain this goal. Investing in employees might make them feel more connected to the company and more eager to go the additional mile when needed.
224. Establish Client Flexibility
Negotiated flexibility, in which one hand washes the other, is one way to help build customer loyalty. Offer incentives in exchange for a certain amount of sales volume, or tailor your services in exchange for shorter payment terms. Being flexible can generate goodwill and repeat consumers, in addition to improving variables that assist to stabilize revenue streams.
225. Create an Emergency Fund
A cash cushion is a prudent company investment, just as every financial adviser advises individual savers to develop an emergency fund to cover personal needs. This is especially true for smaller businesses that can't simply reach loan markets like a huge corporation. Make an emergency cash fund to cover up to six months' worth of vital expenses, such as payroll, inventory, and utilities. Collecting receivables aggressively can help you get started.
226. Assess the Risk Tolerance
Assess how much risk your company can tolerate, its risk mindset, and how much additional risk it's willing to take. It's critical to examine your leaders, personnel, and processes honestly in order to understand how adaptive they are and how much risk they can take before cracking under pressure. Include both the hard and soft costs of missing targets, such as reputation management.
Josephine Li of Cicinia
227. Assess Workforce Needs
Assess the number of employees and their abilities to see if they match what your company could require during a downturn. Prepare to make changes to ensure that staff work efficiently and are organized to their full capacity.
228. Find Ways to Cut Back
Maintaining a product's level of quality is more vital during a recession, therefore cutting operating expenses can be difficult. Customers should be able to see whatever you decide to cut. When looking for methods to save money, start with the biggest expenses and see if there are any little changes that can result in significant savings, such as taking advantage of supplier early pay discounts.
229. Reduce Overhead
Because overhead expenditures are fixed regardless of revenue, they become particularly burdensome during a recession. However, a slash-and-burn strategy might do more harm than good, so it's helpful to divide overhead reductions into three stages: easy trimming, cuts that require process adjustments, and drastic cuts. Renegotiating contracts with suppliers or switching vendors for services like office cleaning or communications are simple ways to save money.
Gary Warner of Joloda
230. Operate Within Your Budget
Operating within your budget makes obvious sense so that your company is in the best possible position should a recession strike. In reality, sticking to a budget or operating plan is always a good idea. Some recessions, such as the one that coincided with the outbreak of the COVID-19 pandemic, occur without notice.
231. Pay Down Debt
Coming into a recession with as little debt as possible allows a company to have the most cash accessible in the future, should it be needed. Prepaying debt can also save money on interest, which can be saved in cash reserves.
Harry Hughes of Dangler
232. Create an Action Plan
Conducting scenario planning and developing response plans is a good practice that may be done well before a crisis occurs. Making comprehensive action plans might help you avoid making mistakes or making poor decisions in the heat of the moment. Employee buy-in can be pre-baked by soliciting ideas from them before the plan is implemented.
233. Modify Your Offerings
Identify ways to make a product or service more appealing to customers during a slump. To accommodate the way clients' wants could alter during an economic downturn, changes can be made to the product itself, how it's delivered, and how it's priced. Offering new product assortments or sizes, providing services electronically, or transitioning from formal dress wear to casual loungewear are all examples.
234. Time in Client Relationship
In any economic climate, but especially during a recession, staying close to your customers makes sense. Understanding their evolving wants may enable your company to maintain revenue, while also expanding its market share.
235. Invest in Strategic Partners
There is sometimes strength in numbers. Some strategic alliances might assist in making products or services more appealing to customers. Sometimes, it's an inconvenient manner of dividing a smaller revenue pie. Choose partners who will help you raise the perceived worth of your product, because value, quality, and durability are all things that customers look for during difficult circumstances.
236. Niche Down
Take a leaf from the recession-resistant industries, where customers continue to buy critical goods and services. Even if your product or service isn't as critical as, say, ambulance services, create a similar sentiment among customers. Niche down is one technique to accomplish this. Niching down is catering so closely to a single need that your company becomes the go-to source for it. Become a gluten-free bakery instead of an all-purpose bakery.
237. Strategize Yourself
Many businesses rely on a few key individuals to keep them going. However, just as parents launch capable children, company owners should set up their enterprises to exist on their own. Setting up a firm and its operations in such a way that they would continue to be successful if the company was sold to an outside organization is one technique to attain this goal.
238. Rethink Your Team
As your company grows, you may add team members as needed, but you may not consider the big picture. Is your team operating at peak efficiency? Evaluate how your team's roles and reporting structure are organized. You could even find that you can reduce the number of hours you need to work.
239. Create an Action Plan
When business is slow, what do you do? Do you twiddle your thumbs and hope it picks up again because you don't know what else to do? If that's the case, you're not alone. The issue is that most organizations wait until their business is in trouble before trying to come up with solutions. Instead, you should make a plan ahead of time.
Joanne King of ICMP
240. Track Your Marketing
When there's a recession, one of the most common blunders is to cut your marketing budget. During a downturn, your marketing becomes even more crucial because you need to bring in new business. While you should never completely eliminate marketing, there may be instances when you need to minimize costs. You'll need a lot of data to do this correctly.
241. Stay in Continuous Contact
Your marketing and advertising efforts should not be solely focused on attracting new customers. Did you know that 20% of your customer base accounts for 80% of your profits on average? You require marketing techniques that nurture your relationships over time.
242. Build Up Your Credit
Although no business wants to borrow money, we must admit that it is never out of the question. The last thing you want is to find yourself in a situation where you need a loan but your credit is too bad to qualify for one.
Build your company's credit to secure your future. There are some actions you can take right now to make getting a loan more affordable in the future easier.
243. Take Care of You First
Business owners who undertake personal financial planning can recession-proof their business. When a recession hits, you may lose an income stream and if your personal finances aren’t in order, the future of your business could be affected. It’s essential your personal finances are a priority so that when a recession hits, you can spend more time and energy on your business. Taking care of your personal finances first means you can balance the growth of your business with financial security.
244. Income Diversification
Diversification of income is a key way to protect your business during a recession. In order to keep your income more independent from economic factors, you should have different sources of income at different price points. When the economy takes a turn for the worse, things like digital and physical products, a monthly/recurring membership group, ad revenue, and sponsored content can really help your bottom line.
245. Diversifying Revenue Sources
Diversifying revenue sources is a tactic that can significantly help small businesses during this difficult time. It's worth protecting yourself in a variety of ways. Unfortunately, the reality is that you don't know what to expect in the future, and you have to be ready for anything. It's easy to lose customers and having a more extensive base instead of relying on one is crucial.
246. Secure Recurring Revenue
Small businesses should focus all of their efforts on securing a loyal customer base. In order to prepare for recession, they should spend the next few months going above and beyond for their customers, building relationships & ensuring repeat customers. Businesses can do this by establishing personal relationships with their clients and even setting up payment plans for their clients if they need financial help. This way, if the impending recession occurs, companies can ensure recurring revenue.
247. Hold Cash & Alternative Assets
As an entrepreneur, don't forget to save money while business is thriving. This will ensure a healthy financial cushion to ride out any future recessions or economic downturns.
It's also not a bad idea to diversify your savings into alternative assets like gold, silver, and even bitcoin. Of course, do your own due diligence as to which safe haven investments make the most sense for you and your business.
248. Diversify Your Income Streams
Is your primary service or offer "recession-proof?" If not, you might want to add income streams related to your primary business, or even explore opportunities that are not directly in line with your current business.
Like a bucket of investments, the more diversified your sources of income, the better chance you have to ride out a financial storm.
249. Win the Competition's Customer
If your small business wants to thrive in difficult times, you must continue to grow your customer/client base. This means pulling customers away from your competitors. Offer something extra or unique than the competition. Study your competition to determine what you can do to persuade their customers to switch to you. Visit their places of business. Ask about what consumers enjoy and dislike about such businesses, and adjust your own business operations accordingly.
250. Plan Ahead for Risk Management
If the pandemic taught us one thing, it's that business can experience dramatic halts at any time. That's why it's crucial to strategize a risk management plan to cover the most important bases of your company. Consider creating an emergency fund to absorb unexpected expenses. Now is the best time to start building a network of fellow experts in your niche that you can reach out to in the face of a crisis. The steps you organize today could save you a fortune in the future.
251. Examine Pricing Options
We should look into different price possibilities as we consider offering our products and services to different types of clients than we have in the past. Different selling strategies can open doors to new business and make our products and services more accessible to customers who are afraid to commit during uncertain times. We may, for example, consider renting items rather than selling them. We could look into selling smaller, less expensive versions of our service.
252. Have a Solid Customer Service
Building solid customer service is one of the most underrated recession-proofing strategies. If you are looking for long-term stability even in a bad economic environment, you need to keep your existing customers around. The best way to do this is to keep your focus on the wants and needs of your buyers. You need to listen to their concerns and resolve them as early as possible. You need to also make sure that your staff is well-equipped to deal with any and all customer queries.
253. Delight Your Current Customers
Offer a free webinar or e-learning course exclusively available to current clients. Sometimes a small business in “panic mode” goes straight to more advertising, new products, or entirely rethinking their business model to attract new customers in a downturn. Your current clients will always be your best brand ambassadors and the most likely to give you referrals and repeat business. Pour your efforts into delighting the people who’ve already proved loyal to your business.