We all remember the Great Recession between 2007 and 2009. The pains experienced during those tumultuous years brought many lessons learned for the future.
Today, we are experiencing a brand-new economic downturn brought on by the coronavirus pandemic.
Economies across the globe are plummeting due to businesses laying off workers, transitioning to remote work, and even closing their doors for good.
If you are a small business owner, the last thing you want is to watch all of your blood, sweat, and tears go down the drain due to a recession.
To ensure your company lasts through the long haul, it is important you take preventative measures to ensure your business remains in good standing.
Take a look at our top five ways to recession-proof your business.
1. Keep your finances in check
Financial management is key when it comes to protecting your business.
This is especially true if you are trying to weather the storm of a recession, so make sure you set up a cash flow planner to prepare for an economic downturn.
To manage your business finances, consider these tips:
Manage your accounting: Whether you have an in-house accountant or use the help of accounting software or an accounting firm, make sure you keep track of your costs, income, assets, and debts.
Stay on top of invoices: If you rely on invoices, make sure you keep track of them and send them out immediately after providing services or goods, as it can be easy for customers to forget to pay you.
Know when to get a loan: You don’t want to wait to get a loan before it is too late.
As you manage your finances and make financial predictions for the future, think about when you might need a loan, whether it be a loan from hard money lenders in Arizona or a business loan in Oregon, for example.
This way, you’ll have funds that can be used for expansion or an emergency.
Pay with a business credit card: The last thing you want to do is mix your personal and business finances together.
Not only can it be difficult to separate what is personal and business-related, but it can also land you in legal trouble with the IRS.
There is a lot to keep track of when it comes to your business’s finances. While this isn’t an exhaustive list, these tips can help you manage your finances and recession-proof your business.
Other tips include using a separate business bank account, reducing travel costs, renting instead of buying, and keeping track of any legal fees.
2. Create new offers and deals
While we may be in economically hard times, it doesn’t mean consumers aren’t buying.
However, it does mean they may be looking for discounted items to save money. To bring more people in and drive sales, roll out new offers and deals that customers need.
For example, do you offer a program, such as a 10-week training program? Consider extending the offer to 15 weeks. Or, can you turn in-person offers into virtual offers that customers can benefit from at home?
There are plenty of ways you can create new offers, extend existing ones, and provide deals.
Make sure to listen to your customers and what they ask for, and you’ll be able to keep your business in good standing, even during a recession.
3. Offer new products
Along with new offers and deals, consider offering new products and services.
It is during times of hardship where companies either make a name for themselves or fall into the abyss, never to be heard from again.
In fact, many businesses we’ve come to love today were born during the Great Recession over a decade ago, such as Uber, WhatsApp, Venmo, Groupon, and Instagram.
With that said, take a hard look at gaps in your market or industry and think of innovative solutions that can help your customers. You never know, you may be the next big success story!
However, you don’t have to hire a team of innovators to think of new products. You can simply repurpose existing products and tweak them for another market.
For example, if you are a sustainable clothing brand, consider making a few athletic pieces for exercise enthusiasts.
Expansion is another way you can recession-proof your business. While expanding can be costly, it can pay off in the long run and keep your business afloat.
However, it is important to always do market research to determine areas where a storefront will succeed.
You can consider expanding internationally by opening shops in Canada, Mexico, or overseas. Or, you can expand domestically by opening more stores in your state or around the country.
With careful planning, market research, and financial management, you might be able to grow your business and reach a broader audience.
5. Continue marketing
Marketing is essential for every business’s success. But are you doing enough to reach as many people as you can?
There are numerous marketing routes you can take, such as paid advertising, organic growth, and social media marketing.
While you may want to cut marketing expenses to save money during hard times, doing so can do more harm than good. Consider these marketing tactics to recession-proof your business:
Paid advertising: Paid advertising is when you pay, rather than earn, advertising.
You can go the traditional route with billboard and newspaper ads, or go digital with pay-per-click, pay-per-impression, and Facebook or Google ads.
Organic advertising: Unlike paid advertising, organic advertising is free and is achieved by taking advantage of search engines like Google and Bing.
Search engine optimization (SEO) plays a major role in organic advertising and is the act of improving the quality and quantity of traffic to your website.
To get organic search results through SEO, produce optimized content, improve user experience, and focus on keyword research.
Social media advertising: Instagram, Facebook, Twitter, Pinterest, YouTube—these are just some of the most popular free social media channels your company can take advantage of to reach more people and grow your customer base.
Some key tips for social media marketing include posting engaging content and graphics, interacting with customers, and posting at the right time.
With these marketing tips, you’ll be able to attract new people to your business and make more sales.
Wrapping up: Smart ways to recession-proof your business
Owning a business takes a lot of responsibility, and every business owner wants their company to succeed and thrive, even during economically challenging times.
Having a plan in place to recession-proof your business will ensure it doesn’t go under, even when consumers start to spend less or markets drop.
With these five tips, from creating new offers and deals to rolling out new marketing tactics, you’ll be able to protect your business during times of hardship.
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Samantha Rupp holds a Bachelor of Science in Business Administration. She is the managing editor for 365businesstips.com as well as runs a personal blog, mixedbitsmedia.com. She lives in San Diego, California, and enjoys spending time on the beach, reading up on current industry trends, and traveling.