4 Ways to Recession-Proof Your Small Business
The whispers of recession are getting louder. It’s enough to leave business owners worried. The Great Recession was devastating for the small business community. While it’s understandable to be concerned, there are a number of ways to recession-proof your small business. You have a lot of options, including small business loans, at your disposal to protect and strengthen your business. Here are four noteworthy tips that can help you be prepared for the possible coming storm.
Look at the Back End of Your Business
Chances are that you depend on a bunch of other companies to keep your own business operations running. What happens if one of those businesses go under? A recent Entrepreneur report recommended building relationships with a variety of suppliers and vendors to help recession-proof your small business. By building relationships with alternative options, you are positioned to more easily transition in the event that a recession has an adverse impact on a supplier or business you rely on.
Invest in Your Employees
A weak team can fall apart under stress. A strong one can push through adversity. A recent Inc. report pointed to focusing on employees as a great way to recession-proof your small business. Doing so creates a strong sense of connection between workers. In particular, the news source recommended that strategic hiring can be useful, finding a key correlation between adding key staff and positive business outcomes. Instead of simply increasing staff, create a culture of honesty and openness, fostering the kind of transparency that helps your teams function at their best through both good and tough times.
Revisit Your Revenue Strategies
If you want to recession-proof your small business, you need to be sure you have diverse sources of income. Recessions tend to have a highly varied impact on different industries. One sector may be hit hard while another is barely impacted. But if your revenue stems primarily from a single line of business – perhaps B2B services focused on a certain sector – you can run into excess stress during a recession. An Entrepreneur report recommended that businesses prepping for a recession should work to target companies and customers across multiple industries to avoid taking a single, huge hit in the event of a downturn.
In some cases, you may need to tweak your products and services to do this. However, the investment could prove worth it to help prevent major problems if a recession hits the industry you serve particularly hard.
Get Ahead on Financing
The Entrepreneur and Inc. reports both recommend moving quickly to secure financing before a downturn hits. Access to funding can dry up during a recession. If you seek small business loans from a point of strength, you are more likely to get the funds you need. Starting when the economy is healthy can position you for a better deal on your loan as well. From there, you’ll have the cash readily available to sustain and grow your business despite problems in the larger marketplace.
Recession-Proof Your Small Business Now
Small businesses face unique challenges during a recession. While a large company may have the capital or human resources to adapt, small businesses can get locked into difficult situations if they aren’t careful. The key is to build your operations for resiliency. The tips we’ve talked about center on that idea. Recession-proofing your small business is about giving your business the flexibility to adapt when changes occur.
You can’t control how various industries will respond to a recession. You can’t dictate what your suppliers and vendors will do. But you can strengthen your own business infrastructure. You can do this by focusing on staff, diversifying your vendor and revenue footprint, and thinking ahead with the help of small business loans. QuickBridge can help you on this journey. We offer flexible, short-term small business loans that help you invest in your operations without taking on excess risk. Contact us today to learn more.