A recession can take a toll on your business. It contributes to decreased sales and affects customer confidence in making regular purchases. Small businesses are more vulnerable to a harsh economy than larger businesses due to the minimal reserves that could have helped them handle complex and unplanned financial difficulties. It’s important to note that most people, including existing customers, have similar sentiments. If consumers feel the economy is dreadful and not befitting their allocated monthly budget, their spending habits will also change. 

Having noted that, there are a few tips you, as a business owner, can follow to protect your business and safeguard its existence. Here are some points to help you re-strategize your business and recession-proof it: 

1. Guard your cash flow.

Ensure your business has continuous money flowing in and out of your wallet for optimum business wellness. We say the goal of every business is to make more income than expenses spent on its daily survival. Therefore, design and implement strategies that will keep the cash flowing, like trimming unnecessary costs or increasing billable services that can bring you money while fulfilling your business goals. Cash flow is equivalent to the lifeblood of your business. If your business is going through financial hardships, consider taking a loan after an intense evaluation to improve your company’s financial wellness as you look forward to making more profits and repaying the loan. Amica Savings & Credit provides financing to business people, like Business Loans and Stock Boosta Loans, to help them replenish their stock and attain financial prosperity. 

2. Inventory management

Do your best to reduce your inventory costs without destroying the quality of your production or lowering customer satisfaction. You could be surprised that you have been buying too many items, contributing to a heightened budget. Additionally, you can interact with cheaper vendors who can provide resources at a better price. Finally, find ways to eliminate warehousing costs by researching alternative drop-shipping services that minimize your budget. 

3. Online presence

Research indicates that over 50% of customers start their sales journey on Google Search. Additionally, 93% of consumers also use Google to source local businesses and services. Customers spend at least eight hours a day online. Therefore, it’s crucial to have a robust online presence in this day and age. Consider having a company website, social media marketing, content marketing, paid advertising, and email marketing. These will allow your business to connect to your current and potential customers. Invest in a business strategy that makes your company visible on digital channels. Do not, at any point, make the mistake of cutting your marketing budget in a lean time. Customers will always be on the lookout to change their buying decisions. That being the case, don’t quit on marketing. 

4. Be mindful of your credit score.

As mentioned above, small business loans often fill the financial gap to ensure a constant flow of money into the business. When a recession hits the economy, borrowing from financial institutions gets tougher. Nonetheless, with a good credit score, financial institutions will entrust you with a loan, and with a good business strategy, you will make profits and repay your loans effortlessly. Regularly monitor your credit score to have a better chance of accessing a loan that will keep your business afloat and in good shape. 

It’s close to impossible to make your business 100% recession-proof. However, executing the above tips could help your business survive a recession and grow revenue in such lean periods. Analyze how you are handling your business so far, seek financial advice, and look for new strategies to help you and your business succeed. 

Talk to us if you need a friend to help you Plan Smarter so you can Live Better.