With the current situation, a lot of financial experts fear that an economic recession might hit us one of these days. It’s only a matter of time before it happens. Now is the perfect time to make sure your business is recession-proof.
Here are some ways to prepare your business for an impending recession.
Monitor your numbers
One good practice you can do for your business is to have a clear understanding of your projections and financial figures. Generate a business plan of projected profit and expenses at the start of each year. Be efficient while searching for more ways to expand your sources of revenue. Monitoring expenses and finding ways to reduce them is as important as generating profit.
Settle your debts
Entrepreneurs would often obtain loans to finance their business. If you owe money to support your brand, do what it takes to settle them as soon as you can. The reason for this is if a recession occurs and you’ve already reached your credit limit, the chances of you getting financial assistance will be slim. According to research, 36% of small businesses that applied for funding were denied because of their credit rating. The percentage could go higher if a recession happens. Some banks do offer bonus cash promos during these uncertain times and would be a good opportunity to catch extra cash like this one from Bank of America Promotions.
Settling your debts should be prioritized. Once all your debt-free, avoid borrowing funds again unless you have no other choice. Review your budget and identify where you can cut some expenses.
Close more deals
Obviously, having more clients would mean more chances to generate profit. There are a lot of ways to make your presence felt to potential clients. You don’t always have to spend a lot of money to promote your brand. There are other strategies to advertise, such as word-of-mouth marketing, asking existing clients for referrals, attending conventions to expand your network, and many more. These methods require your time and effort rather than a huge capital.
When times get tough, you have to identify what your brand really needs to thrive. Business owners must distinguish the expenses they make that have minimal impact on your brand’s growth. Reducing expenses should be one of the first steps taken when the economy becomes unstable. Review your company’s budget for supplies, travel expenses, marketing expenses, etc. Evaluate which ones you can hold off for the meantime.
Strengthen relationships with your clients
Your clients should always be the top priority of your business. According to a study, 58% of customers are willing to spend more with a company that provides good customer service. Remember that they are also facing challenges the current situation brings, knowing that their business is being taken care of amidst the threat of a recession would mean a lot. Providing the best outputs for your existing clients will improve customer retention and can be a good source of new leads. Other entrepreneurs make the mistake of focusing only on closing new deals with new clients and overlook their relationship with old clients. Retaining customers through excellent service is easier than acquiring new ones by means of various marketing techniques. Satisfied clients can also act as endorsers for your brand by sharing their experience with potential customers.
Establish a better connection
A good way to prepare your business for a recession is to position it uniquely. Find more ways to reach out to your target market. For example, there are many B2B companies that offer virtual assistance. If one of these companies can successfully help businesses shift to remote work setup and provide the needed services, it would draw a lot of attention and establish itself as a company that can be of service to others, especially at a time like this. People will most likely spend only on things that matter to them or their businesses if a recession happens.
Do what it takes to ensure continuity for your business before the situation becomes worse. Make the needed adjustments for to lessen the impact of a potential recession. Acknowledge the fact that actions have to be taken as early as possible to keep things within your control.
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