Prepare for a recession with these tips
2008 was a frightening time for small business owners. Decreased sales and a decline in consumer confidence threatened all businesses during the recession, but small businesses are particularly vulnerable to changes in the economy because they are less likely to have the reserves to get them through difficult times. However, that does not mean you can't recession-proof your business. Implementing these practices now will help your small business survive and even thrive during economic downturns [3].
Protect Your Cash Flow
Cash needs to continue flowing to keep your small business healthy. Keep the flow going by weeding out unprofitable customers, invoicing promptly, favorably renegotiating contracts when possible and extending payments to suppliers when truly needed.
Focus on Your Core Competencies
Diversification is sometimes important, but too many small business owners oversimplify “diversification” to mean “different.” Adding services or products just for the sake of offering them is a waste of time and money. It can even damage your core business by distracting from what you do best and damaging your reputation and brand. To recession-proof your business, focus on the most profitable parts of your business and what you do best.
Get to Your Competition's Customers
Expanding your client base is essential to weathering an economic downturn. Research your competition and offer something different to woo their customers into your business.
Target the Clients You Already Have
Finding new clients is expensive and time consuming. Increase sales [4] from your existing customers by advertising promotions, distributing free samples of new products, holding events and setting up a rewards program for your most loyal customers.
How did your business survive the recession? What do you do to protect your business from future economic downturns? Share your advice in the comments below!