Are we in a recession? While we cannot absolutely establish yet whether we’re truly in a recession, the risks are increasing. Small businesses need to be prepared either way. The U.S. economy has shrunk for two quarters in a row. With two straight quarters of economic decline, recession is on the minds of all businesspeople.
There are things you can do to help recession-proof your business. If we’ve learned anything over the past two years, it would be the importance of adaptability.
Change is inevitable, so the ability to pivot and be flexible is key to surviving in recessionary times. Change can be difficult. But pride, stubbornness, or tradition must not be allowed to impede survival.
Listening to, understanding, and serving your customers’ needs is always important. But it’s crucial to empathize with their struggles when recession looms. To understand how your customers’ needs may be shifting as the economy changes, do some primary research via surveys or focus groups.
Cut unnecessary costs. Keeping a close eye on expenses and cash flow pinpoint when and where you may need to cut back on costs to avoid overspending. It is always recommended to keep six months’ worth of expenses in liquid savings in case your sales drop, but that’s not always possible. If you find yourself continually short on cash flow, it may be time to explore various financing options.
In addition to cutting expenses, you must know where your business stands financially. You need to understand what’s happening with your cash flow, profit margins, inventory, and monthly sales. Accounting software allows you to closely monitor your day-to-day operations.
Recessions are also stressful for your employees. They may be feeling uncertain about what the future holds, and–even in the current job market–may be worried about losing their jobs. Your job is to communicate openly and frequently with your employees. Keep them informed as to what’s going on with your business and why you’re making certain decisions.
It’s also helpful to begin building an agile workforce before a recession hits. If possible, give employees the option to work remotely. You can also supplement your business employment needs with freelancers or independent contractors.
Surviving an economic downturn is difficult for any business owner. Still, it is important to keep looking for opportunities even when things seem bleak. Keep up strong marketing and advertising campaigns and projects.
Businesses that continuously invest in themselves regardless of the economic environment are the ones who bounce back faster and better when good times return.
Please join us in welcoming new Chamber member Strive Wellness Group. Eric Crook can be reached at 620-266-2497 or email@example.com.
And remember: Thursday, August 18, is the last day to complete the Chamber Blue association health plan survey. Questions? Contact Jeanine McKenna at 620-342-1600 or stop by the Chamber office at 719 Commercial Street.
It’s a great day in Emporia!
“Let’s Talk Business” is a weekly column of the Emporia Area Chamber of Commerce and Visit Emporia. The mission of the Chamber is to be proactive in creating an environment for business and community success, guided by the vision that positive attitudes promote positive actions. Contact us at 620-342-1600 or firstname.lastname@example.org and visit our website at www.emporiakschamber.org.