It’s almost impossible to predict when an economic recession will happen, but if you prepare your small business accordingly, you’ll be in much better shape when one does strike. By following these seven steps, you can give yourself the best chance of success and actually thrive during an economic recession
1) Assess your cash flow
One of the first things you should do when preparing your small business for an economic recession is assess your cash flow. Look at how much money is coming in and going out, and try to make cuts where possible. You may also want to look into ways to increase revenue, such as offering new products or services. If you’re unsure about which direction to take, speak with a professional who can offer advice tailored to your situation.
2) Keep your customers satisfied
In any economic downturn, it’s more important than ever to keep your customers happy. Why? Because they’re the ones who will stick with you during tough times. Even if you have to offer a discount or freebies for a time, do whatever it takes to make sure that they don’t go elsewhere. Make sure that customer service is top notch and provide any additional perks (like loyalty programs) in order to retain them as long as possible. The best way to get out of an economic recession is by staying on top of your game and keeping your existing clients happy!
3) Have a plan B
Many small businesses don’t survive an economic recession because they don’t have a plan B. If your business is reliant on one income stream, what will you do if that dries up? Having a plan B can help you weather the storm and come out the other side stronger than ever. For example, if you are a writer and the publishing industry crashes, consider self-publishing or starting your own publishing company.
4) Save Money
You should also have plans in place for when bad times hit: Have enough cash reserves saved so that you can carry on trading for at least 6 months after being laid off or suffering another loss of income. You should also consider saving enough money to live off for 6 months before finding work again. We recommend setting aside 12-18 months worth of living expenses, which would cover your mortgage and other expenses. If the worst happens, and there is no way out, then this will help provide a buffer and a safety net from bankruptcy or foreclosure.
5) Let go of things you can’t control
One of the most important things you can do during an economic recession is to focus on the things you can control. You can’t control the economy, but you can control how your business responds to it. Let go of any non-essential expenses, and focus on ways to make your business more efficient and lean. Keep a watchful eye on your cash flow, and be ready to cut back if necessary. Stay focused on what matters: The last thing you want to happen in a recession is having customers lose confidence in your company because they think it won’t survive.
6) Stay optimistic!
It’s easy to get caught up in the doom and gloom of an economic recession, but it’s important to stay positive. Small businesses are the backbone of the American economy, and we’ve proven time and time again that we can weather any storm. We’ve overcome depressions, recessions, market crashes – you name it! So while a new one might be scary, with these 7 steps your small business will be prepared.
7) Speak to a Funding Specialist
Contact United Funding Group for funding for your small business. We can help you get the funding you need to weather an economic recession.
If you don’t have enough cash flow to keep your business going during a recession, it can quickly turn into a death spiral. A merchant cash advance from UFG is the best way to keep your business alive and thriving in this difficult environment.
United Funding Group provides funding for all types of businesses, regardless of industry. In fact, we provide merchant cash advances for many industries including: retail, service, restaurant, real estate investment. Whether you’re expanding your business or opening a new one, we can get you funded quickly and easily. Contact us today to learn more about merchant cash advances from United Funding Group.