7 Hacks For Recession-Proofing Your Business
Talks of recession are everywhere, tax rules seem to changing at the drop of a hat and it’s scary🤯
We feel you.
Businesses have taken a hammering since the pandemic and we think enough is enough.
So, here are 7 hacks for recession-proofing your business📈
The point of this article is to help you feel confident within your business despite the economic circumstances.
You’ve made it through a global pandemic already, you’ve totally got this!
Let’s get into it…
7 Hacks For Recession-Proofing Your Business 👇
First off, it’s important that as a business owner, you decide what a recession means to you?
By definition, a recession is…
‘A period of temporary economic decline during which trade and industrial activity are reduced’
So, our aim today is to help you decide what this would look like in your business and how can you adapt your business to counteract it?
Time for the hacks…
1) Cash is king 💷
It should be noted that recession-proofing should be done in advance of a recession which is why we want to help you put plans in place now. One sure-fire way to do that is to have a cash reserve.
This sounds scary when times are tough but it’s important just as a general rule of thumb in business. You should aim to always have a reserve that can cover 6 months of your business expenses.
Cash reserves are also what we advise clients to have when it comes to their VAT and Tax bills. If they have a separate account where they save the money as they go, their bill is paid for with no surprises.
If you are unsure where to begin on building a cash reserve, you can speak to us. We can make you aware of potential problem areas in your accounting and advise you on areas that you should be giving more focus to.
2) Multiple revenue streams are the key to success 🔑
This is having various ways of making money from what you do.
You can do this both within your business and outside of your business.
We realise that sounds pretty vague so here are some examples:
Within your business:
We have a client that works in the beauty industry with their own salon. As well as offering their standard services, they also offer things like:
– Party packages – Where you and your friends go to their salon for a pamper or they go to you.
– Specialised offers – Mothers’ Day packages, Valentine’s Day packages, birthday packages, etc.
– Training – They offer training workshops on how to style your hair, do updos, etc.
– Giftcards.
All of these offer income through different ways whilst still relating to the services they provide.
Outside of your business:
Speak to a Financial Planner – Investing in areas like stocks, shares, property, etc, is a great way to build your income. Speaking with a financial planner will help you make the right investments for your situation.
3) Invest in your employees 👊
Not only will this help your team be more adaptable and efficient during challenging times, it will also empower them and encourage commitment and loyalty.
If you’re investing in your team, even when times are tough, they will be there to support you too.
4) Invest in your marketing 📱
When business owners panic about cutting costs, they often make the mistake of cutting their marketing budget. This isn’t helpful.
When times are tough, your business needs exposure more than ever. So, instead of cutting your budget, change up your strategy. Whether you do it yourself or use a company to do it, come up with a strategy that works with the circumstances and watch your business thrive.
5) Build on your current customer base 🤝
A huge part of recession-proofing your business is ensuring the clients/customers you do have, are happy.
Are you providing good customer service? Do you get back to them quickly and effectively? Are you continuously nurturing the relationship? Are you asking them if you can do anything better to support them?
6) Be flexible with what you offer ✅
As well as having multiple revenue streams, it’s important to be flexible with your service offerings to better suit the circumstances.
For example, during the pandemic, the hospitality industry had two options – Adapt or close, so businesses got creative.
They offered delivery services, food packages for making your dining-out favourites at home, etc.
How can your business adapt to the fact it’s also a difficult time for your customers, whilst still providing them with a service?
7) Ask the difficult questions 🤔
Quite simply, ask yourself and your team, what could cause us to go out of business within 12 months? Then, you can work through these issues and come up with actionable solutions to stop this from happening.
For example…
Issue – Not having enough stock to fulfil orders.
This could be because either the price from your suppliers goes up due to the recession or the demand is lower so your supplier isn’t producing as much as usual.
How can you combat this?
– Build up a reserve of stock that is enough to provide your regular customers, giving you breathing room to source a new supplier/ wait for stock to come in, etc.
– Nurture your current customer base so they feel like they get the best possible service. Therefore, if there are bumps in the road, they are less likely to leave.
– Offer other products or services relevant to what you already offer – Then, if there is a problem or delay, you have other options you can offer.
There you have it. Our 7 hacks for recession-proofing your business 🙌
We hope they will put you at ease and give you the confidence to know you have got this.
If you’d like to discuss any of these points further, or anything to do with your business finances, get in touch.
Would you like some new ideas for your business? For Free?! 🎉
A great way to get new ideas for your business is to talk to other people who are doing it just like you – Come along to our informal networking events each month.
We have a monthly Book Club and Thirsty Thursday (informal networking at the pub!). To find out more, and see when they are, click here. We’d love to see you! 🍻
Take it easy.
Rob, Al & Led
