Are you starting to worry about an impending recession in the United States? With more than 36 million people recently filing for unemployment in the past two months, the US economy is beginning to look quite scary. It looks like business will continue to remain slow and stagnant for the second half of 2020.
The coronavirus shutdowns have wreaked major havoc on businesses far and wide throughout the United States and the rest of the world. And with fears that the pandemic is going to regain strength now that businesses are starting to reopen again, the financial picture hasn’t looked this grim since the Great Depression.
What are you doing to prepare for the impending worsening recession? Have you taken the necessary steps to batten down the hatches and secure your business? Or are you lost and in need of additional help?
No matter what, it’s possible to protect your business during a recession. We’d like to share five things that every business should consider doing in order to recession-proof their company.
While these suggestions aren’t 100% foolproof, they will put your business in a much stronger position now that you have to face the inevitable economic slowdown. Please use this information to your benefit and take the necessary steps to protect your company during an economic downturn that could reach all the way to the end of 2021.
- Pay Off Company Debt
Is your small business currently in debt? Having large debt payments looming over your head during a recession can create massive amounts of anxiety and financial pressure. Instead of experiencing a difficult 6 to 9 months or more before the recession finally turns around, consider taking the necessary steps to pay off as much of your debt as you can before your business slows down even further.
This isn’t going to be possible for every business because some companies immediately had to shut down their operation in its entirety because of the coronavirus. But things are starting to open up now although business is going to take place at a much slower pace. If you have the finances available to pay your loans, you should seriously consider eliminating this stressful burden from your life as much as you possibly can.
Obviously, you should only pay your loans to the extent that you can afford them without putting your existing business in jeopardy. But if you think you’ll need the money available to make payroll, pay your rent, or cover other business-related expenses than you should keep your cash on hand as much as possible.
All in all, if you have the extra capital then you should definitely pay your loans to the extent that you feel comfortable doing so. As long as you can comfortably afford it without hurting your business, pay down your loans, and eliminate this financial burden while it’s possible because you never know where the future will take you.
- Eliminate Any and All Unnecessary Business Expenses
Do you currently have expenses that are no longer needed in a much slower and tougher economic environment? Are you paying for things that were beneficial when you were making money hand over fist, but might not be necessary now that business is no longer as booming as it once was?
Spend some time to look at your company expenses and go over your entire accounts payable with a fine-tooth comb. Scrutinize each expense and determine if it’s an absolute necessity right now or not.
When all’s said and done, the more you lower your company expenses, the easier you’ll be able to survive and possibly even thrive during the economic downturn. The point of this exercise is to keep as much of your income in your pocket as you possibly can by avoiding paying for things that are helpful but not 100% necessary to run your business effectively.
Some areas to consider include:
- Move into a smaller, less expensive workspace
- Temporarily furlough members of your staff
- Create strategic partnerships with other businesses to pay less for goods and services
- Cut down on vehicle expenses
- Cut the costs that you currently pay for supplies by renegotiating contracts with your vendors
- Lower your advertising expenses
- Cut back on your insurance expenses
- Track business expenses and keep thorough records to lower your tax bill
- Add New Products and Services to Your Current Offerings
Right now, while business is really slow, you should think about developing new products or adding new services to your current offerings. By focusing on these areas during the slow times, you can possibly convince your customers to spend more money which will add to your bottom line.
As an example, let’s say your company sells accounting software in the cloud computing space and your customers pay a monthly fee for the service. Are there any similar add-on services that you can incorporate into your accounting software? Can you offer these additional add-ons to your current customer base for a small monthly fee?
This is one simple way that you can add additional products or services to your business that will help boost your bottom line during tough economic times. Spend some time creatively thinking about ways that you can help your customers. Use this time to come up with solutions that you can integrate into your current offerings that your customers will gladly pay for because it’s going to make their lives much simpler.
This is the smartest way to recession-proof your business. The more products and services you have to offer, the greater chance you’ll have at achieving overall and lasting success in the business world.
Another quick way to stand out is to redo your website graphics and your logo design. A quick redesign of your logo gives you a reason to announce this to your customers and followers possibly giving you a small boost in sales. You have to constantly evolve and stay innovative. Buying a new logo design can show your customers you are adapting with the times and staying current.
- Expand Your Business by Offering Products Online
As you can see, businesses now need to focus on offering their products over the Internet to the masses in order to succeed. Instead of focusing on one small geographic location, you can get your offerings in front of billions of people and potentially expand your business by leaps and bounds in the process.
Do you have a product that people all over the world would love? Think about creating a website and offering your product online. Maybe partner with Amazon or eBay and sell your product through their website to get access to millions of potential customers very quickly. You’ll have to give them a cut of the profits, but it’ll be worth it because you can potentially sell your products to a wide array of people fast.
At the end of the day, it’s possible to expand your business tremendously by using the Internet to your advantage. Consider coming up with ways that you can expand your business to take it online and see if you can create valuable products that billions of potential rabid customers would absolutely love.
- Keep Growing Your Business Network
Your business may seem safe and secure now, but you never know what’s going to happen six months from now. The entire landscape might change due to the coronavirus epidemic and the enforced shutdown. Your thriving company might be a shadow of its former self once the dust finally settles as we move deeper and deeper into the coronavirus related recession.
Networking is always critical to the success of every business. You never know what might happen in the future. And you never know what type of associate or business colleague might present a unique and interesting offer that could dramatically improve your bottom line during tough financial times.
Do yourself a huge favor and remember to keep networking at all costs. Develop as many professional connections as you possibly can. Work on these connections even if it doesn’t seem like they will lead you anywhere right now. Because the future is always in flux and you never know where these connections might take you later on when you desperately need to make financial headway in a harsh economic environment.
Bottom Line
Believe it or not, your business may seem like everything is all wine and roses right now because you’re at the top of your game. But things change dramatically as we have all learned from the coronavirus. What seems normal now could be very different in the blink of an eye so you have to be prepared and ready for potential changes.
Use the information shared above to recession-proof your business. By incorporating these strategies into your current business model, you’ll have a much greater chance at lasting through the economic struggle that every business is about to experience if they aren’t experiencing it already.
Take time to read through this information as much as possible until you finally understand what we’re sharing with you. And remember, this information is only valuable once you use it. So take the strategies and run with them because your business will be a lot stronger after you implement these suggestions. Who knows? You might actually survive this recession after all!
