You’ve probably noticed it’s been taking a bit more to fill your gas tank recently. Or that the amount you normally spend on groceries isn’t quite enough anymore.
Well, there’s a reason for these inconvenient changes. Many researchers believe the U.S. is headed toward an inevitable economic recession.
In this article we’ve gathered up a few tips and strategies you can use to make your business “recession proof.”
What is a recession?
Basically, a recession is a period (lasting months or years) of severe economic activity that leads to a decline in stock market values, an increase in unemployment, and other long-lasting effects. And while economic downturns affect everyone in different ways, recessions especially impact businesses.
From large companies to small businesses – no one is immune. For that reason, preparing and making your business recession-proof is imperative.
How can I recession proof my business?
It’s a wise idea to start preparing your business for an economic recession – especially if you’re a small business owner. More than 170,000 small U.S. businesses were closed in the U.S. during the last recession. But don’t get discouraged, surviving a recession is definitely possible.
Below are a few ways to safely begin.
Make drastic cuts across departments
This is probably the easiest and most effective strategy – intense overhead reductions.
Start by reviewing all of your overhead costs and focus on the items that are too pricey, those are the items you want to try to eliminate or if possible, haggle down.
Examples of effective overhead cuts:
- Cancel software subscriptions
- Transition to a remote workforce
- Consider outsourcing certain tasks
- Employee layoffs or downsizing
- Negotiate current vendor contracts
- Eliminate staff perks or benefits
- Get rid of business phone number
- Automate specific operations
There are tons of ways to reduce business costs, and some of these lead to further cuts. For instance, if you switch your company’s operations to a remote work environment, you can say goodbye to those expensive utility and rent bills!
Simply put, if you do this the right way and make practical cuts, you should notice a significant reduction in overhead costs.
Tweak the way your services are offered
Another effective way to recession proof your business is by revamping the way your services are offered to consumers.
Inspect your organization’s pricing structure and try lowering prices on certain products or services. You can even try offering free trial versions to the public or limited time discounts.
Try marketing your goods and services in a more engaging way. There are loads of free marketing apps and tools designed to increase website traffic and sales. Use these programs to your advantage and keep your business alive during a possible recession.
Create a cash flow plan
Developing an actionable plan is the best way to set your company up for success when faced with a possible recession.
It’s vital to understand how much money your business is spending, how much you’re actually receiving, and most importantly, know where the incoming cash is turning out from. Creating a cash flow forecast will allow you to make financial adjustments as needed and give your business the visibility it requires to produce strategic decisions.
There’s several things a business can do to survive a recession. It’s even quite possible for a business to do well during a time of economic uncertainty. But the most important thing any business can do is to simply plan for it.
If you’d like more information on surviving a recession, check out the video below featuring Intrinio’s very own CEO Rachel Carpenter.
Find out how your Fintech startup can prepare for and survive a recession in this quick video guide. And subscribe to our YouTube Channel for weekly fintech content!
Image and article originally from intrinio.com. Read the original article here.