“The time to recession-proof your business is now. Once the economy starts to downturn, it may be too late to turn the ship and make the changes you need to so your business survives, and even thrives, in a worsening economy,” warns Belinda Rosenblum, CPA, and cash strategist for entrepreneurs.
She factors out recession is lengthy overdue by many measures. And, in keeping with the Capital One Small Business Growth Index (Fall 2019), 85% of small enterprise homeowners say their enterprise can be impacted if the financial system entered a recession within the subsequent six months, but solely 32% say they really feel totally ready for a possible recession.
So provided that it’s a matter of when— not if— a recession is coming, what are small enterprise homeowners to do now?
Rosenblum encourages enterprise homeowners to “uplevel” within the following key areas:
- Make clear your messaging
- Be certain you’re attracting your superb purchasers
- Monetize your experience with a transparent technique and worthwhile enterprise mannequin
- Have financing in place for your small business earlier than you want it (from inside or exterior sources)
- Lead your staff and full enterprise.
She observes that “when instances are good, it’s straightforward to let a number of of those areas slide. When instances get leaner—and they’ll—you have to have every of those areas dialed in.”
Rosenblum can also be host of “Recession Proof Your Business,” a free on-line occasion. She and different consultants from the occasion share their greatest ideas for maintaining your money flowing in any financial system.
1. Take management of your money circulate
Belinda Rosenblum, CPA, founding father of OwnYourMoney.com
“A surprisingly massive variety of enterprise homeowners do not need a deal with on their money circulate and even know their numbers. (It’s no marvel that 82% of companies fail due to money circulate points, in keeping with a study by U.S. Bank.) Ensure you know your numbers now and create a transparent imaginative and prescient and revenue plan on your future, together with the place your “lever factors” are to push or pull again relying on the financial scenario.”
2. Construct a number of income streams
Jennifer Allwood, enterprise coach and host of The Jennifer Allwood Show podcast
“One key method to recession-proof your small business is to have a number of income streams. Having quite a lot of methods you’re bringing in income at a variety of value factors is important to take care of your earnings whatever the financial system.
“Incorporating things like affiliate marketing, digital and physical products, a monthly/recurring membership group, one-on-one consulting, ad revenue, and sponsored content can really help your bottom line if the economy takes a downturn. You don’t want to be caught with all your eggs in one basket, unable to make a shift or pivot. Multiple revenue streams will help your business stay flexible and be able to persevere.”
3. Put money into your consumer relationships
Susan McVea, enterprise gross sales strategist and host of Master the Sales Game podcast
“Put money into your consumer relationships! Focus in your greatest present clients as a substitute of investing a big amount of cash to draw new purchasers. Whenever you create the perfect outcomes and expertise on your current buyer base, they may need to do extra enterprise with you and grow to be an necessary supply of recent purchasers as nicely.