A recession. Is it coming? Are we already in one? As we start a new year, experts are still weighing in on the worrisome economic landscape and what it could mean for businesses across the country. Regardless, it’s always important to recession-proof your business, starting with lessons learned from past economic downturns. Here are some top lessons learned (that are still true today) to help you prepare your business to survive and thrive.
1. Diversify your customer base
The saying “Don’t put all your eggs in one basket” applies to your customer base as well. It pays to have diversified income streams across multiple types of customers. That way, you’re prepared in case you suddenly lose a customer segment.
2. Preserve cash/reduce debt
Business owners who were successful in past recessions were those who were not overly leveraged by debt. Aim to increase cash reserves to protect your business during uncertain times.
3. Reduce costs
Keep operations as efficient and lean as possible. What’s more, be selective when hiring suppliers to fit within a comfortable budget.
4. Expect change
It’s impossible to tell the future, but business leaders who can be flexible and pivot to accommodate changing times prove to be more successful than those stuck on auto-pilot. Always be prepared to change to meet your business needs.
5. Take care of your team
Consistent, clear communication is always important, but even more so during an economic downturn. Be transparent with your team about revenues, and stay aware of which benefits are most valued by your employees. Keep everyone informed and as happy as you can to create unity and loyalty amongst your team.
6. Don’t panic
Remember that a recession is only temporary—what goes down must eventually come back up, and vice versa. If you stay prepared, things will improve and you will weather the storm as a strong business owner.