5 Practical Strategies to Recession-Proof Your Small Business

How to Prepare your Small Business for a Recession

Let’s be honest. For many of us, our small business is our 9-5, and to survive during the pandemic we had to make some changes. I’ve learned a thing or two about running a company through national economic hardship:

1. Create a savings account for your small business. 

2. Save money by cutting unnecessary expenses.

3. Master the art of virtual business, i.e., Zoom, Microsoft Teams, and Google Meet.

4. Outsource talent.

5. Delegate responsibilities. 

While I was fortunate enough to learn these lessons, I know so many businesses in my community did not have the same advantages. With the threat of a recession, many more small businesses will take the hit. That could be because they lack the capital, have limited resources and tools, or most importantly, they lack the preparation for recession-proofing their business. Not you, though, because I’m here to motivate you to kick-start your preparation. Let’s get into it. 

5 Strategies to Recession-Proof Your Small Business

1. Pay off credit card debt and keep future balances low

1. Know the numbers. You need to have a thorough understanding of your business’s cash flow.

2. Keep tabs on every dollar that comes and goes. Check your profit/loss statements, balance sheets, and income statements. 

3. Stow as much money into your business savings account as you can afford.

2. Build multiple revenue streams within your business

1. Incorporate affiliate programs, digital and physical products, and/or one-on-one coaching.

2. Start that blog you’ve been wanting to write.

3. Prioritize your dollars. Find where you can cut back on costs and allocate that money toward your more successful services/products.

3. Invest in Client Relationships and Management Systems

1. Cutting costs? Make sure to invest in a quality CRM system (We prefer Dubsado or Honeybook) to automate your business. That way, you won’t have to focus on administrative tasks like sending out emails, scheduling appointments, or writing contracts.

2. Invest in your current customers instead of potential clients. Keeping your current consumer base satisfied is the best way to keep your business afloat. Remember: happy clients are great ambassadors for your company. 

4. Increase your Capital

1. Obtain business credit or secure funding through lenders. 

2. Lean on organizations. Allies for Communities helps small businesses in need of funding.

3. Seek out low-cost financings such as SBA guaranteed loans, bank loans, or even crowdfunding. 

4. Organize your business’s tax returns and financial statements.

5. Develop a Deeper Connection

1. Identify with your consumer base. During a recession, people will still spend money, but they’ll spend it on businesses that have made a connection with them. 

2. Research, Research, Research! Familiarize yourself with your target audience’s needs, interests, and cultural background. Your marketing should be tailored for their lifestyles.

Need extra support? Visit our website and book a free consultation so we can help you best prepare for a recession. Let’s thrive together!